On June 21, 2012, The Consumer Financial Protection Bureau, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (herein “regulators”) issued a joint guidance entitled “Interagency Guidance on Mortgage Servicing Practices Concerning Military Homeowners with Permanent Change of Station Orders” (herein Guidance”) to addresses risks related to military homeowners who have informed their loan servicer that they have received Permanent Change of Station (PCS) orders and who might seek assistance with their mortgage loans. PCS orders, which are non-negotiable and operate under short, strict timelines, occur when a service member is ordered by the military to relocate to a new installation. For military homeowners, receiving PCS orders can present challenges when they are unable to sell their homes to pay off the mortgage debt. For example, a service member’s household income may drop if the service member is unable to find a renter willing to pay rent that will cover the mortgage payment or the spouse is not immediately able to secure a job in the new location. Additionally, a service member’s housing allowance may be lower at the new duty station. Thus, in order to avoid defaulting on their loan obligations, military homeowners need clear, accurate, and timely information about available options such as loan modification or short sale, so they can make informed decisions and request the assistance for which they may qualify. The Guidance, which is intended to ensure compliance with applicable consumer laws and regulations, also advises mortgage loan servicers that their employees should be adequately trained about the options available for assisting military homeowners with PCS orders.

Complete Memorandum