Peter Miller On Real Estate: Home Protection for Military Personnel 'Martial Law'

More than 30,000 off-duty military personnel are being called to serve in the former Yugoslavia. Are you familiar with the 60-year-old law that protects their homes while they’re away?

June 1, 1999

In the quarter of a century since the Vietnam War, much has changed in the military. Women have found new opportunities, there's greater emphasis on technology, and we rely increasingly on personnel and equipment from the National Guard and reserve units.

During the Persian Gulf War, nearly 240,000 reservists and members of the Guard were called up, and President Clinton has begun to activate 33,000 troops to support our efforts in the Balkans.

The military personnel in combat or on peacekeeping missions that you see on the news and in magazines may well include individuals who were civilians just a few weeks before, a reality that shines a light on the Soldiers' and Sailors' Civil Relief Act.

This federal law, passed in 1940 and amended in 1942, assures that those called to active duty won't suffer financially because of their service. The law assumes that in many cases civilians called to active duty will see their income decline, so typical business standards don't apply to them.

Here's what you need to know about how SSCRA rules apply to mortgage rates, foreclosures, evictions, and leases. For the most part, the news is good for the owners and renters you work with.

Mortgage rates—For reservists and members of the National Guard who are away on active duty, mortgage rates can't exceed 6 percent. Section 526 of SSCRA caps the interest rate on other consumer debt at 6 percent as well. But neither is automatic. Service members must show lenders that active duty status has had an adverse and material impact on their financial ability. For instance, Pvt. Smith can request relief from his mortgage lender if his interest rate is 7.5 percent. If he qualifies for the break, the lender must forgive the 1.5 percent difference.

If reservists or members of the Guard have an increase in income as a result of being called to active duty, the interest-reduction provision doesn't apply. The provision also doesn't apply to consumer debt entered into while in military service or to repaying government-insured student loans.

Foreclosures—Reservists and National Guard personnel called to active duty can petition courts to suspend foreclosures. Lt. Col. Tom Begines, a U.S. Defense Department spokesman, explains that mortgage foreclosures involving the sale or seizure of any property can't be carried out without a court order, regardless of contract provisions or state laws to the contrary. In a judicial proceeding involving a mortgage foreclosure, a court can suspend the foreclosure for up to three months after the tour of duty or craft an alternative.

Evictions—Service members and their immediate families can't be evicted from their homes without a court order, providing the rent doesn't exceed $1,200 a month, says Begines. This protection applies regardless of lease terms, rental contracts, or state provisions to the contrary.

But what if a landlord takes the matter to court? A court can suspend the action for up to three months, but only if military service reduces an individual's ability to make the rental payments. In practical terms, a landlord might not even get a hearing date for weeks or months, and it's hard to imagine any court speeding the eviction of service personnel on active duty. In addition, the proceedings could result in astonishingly bad public relations for the landlord.

Leases—Reservists and National Guard personnel called to active duty or their spouses can terminate their leases without penalty and without jeopardizing their security deposits if they provide adequate notice to their landlords, Begines says. According to the law, leases terminate 30 days after the next rental payment is due.

The bottom line is that the government isn't going to activate citizens for military duty and then let them be squeezed financially. That's not only a reasonable position but a fair and decent one as well. As the old saying goes, "There but for the grace of God go you or I.”

For additional information to share with the military personnel you work with, contact housing officers at local military facilities and visit these Web sites:

Air Force Reserve
Air National Guard
Army National Guard
American Forces Information Service
Army Reserve
Coast Guard Reserve
Debt Counselors of America
Marine Corps Reserve
Naval Reserve
Soldiers' and Sailors' Civil Relief Act

Peter G. Miller, OurBroker®, also writes a column that appears in Realty Times each Tuesday, and is the author of The Common Sense Mortgage, the best-selling guide to real estate finance. He's the original creator and host of the Real Estate Center with America Online and maintains a consumer information site at

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