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Special Options for Service Members

You have several ways to offer relief for service members on active duty through the Servicemembers Civil Relief Act (SCRA) and Freddie Mac's own policies. Supporting the SCRA, you can call our Loss Mitigation representatives to speak with a borrower assistance counselor about Freddie Mac's mortgage relief and workout options and how they can be applied to individual cases.

What is the SCRA?

The SCRA, which allows active military members to suspend or postpone some civil financial obligations, was signed into law on December 19, 2003, amending the Soldiers' and Sailors' Civil Relief Act (SSCRA) of 1940. Designed to assist and protect important rights of active duty military members and reservists who are in active federal service, the SSCRA had not included members of the National Guard. Already previously eligible for Freddie Mac relief options, National Guard members called to active state duty in response to a national emergency declared by the president of the United States are now recognized under the SCRA.

Extended Protection Now Available

To help service personnel facing financial problems avoid foreclosure:

• The Housing and Economic Recovery Act (HERA) of 2008 extended the period of time that a 6 percent interest rate cap can be applied to eligible mortgages to include a service member’s period of active duty and one year after release from active duty.
• A HERA amendment to the SCRA temporarily extended the stay of foreclosure proceedings from 90 days to a period of nine months after the service member's release from active duty. Congress then enacted the Helping Heroes Keep Their Homes Act of 2010, which extended the expiration date of the HERA protection for service members to December 31, 2012. Therefore, Servicers must not initiate or resume foreclosure for at least nine months after a service member is released from active duty when the service member is released from active duty on or before December 31, 2012.
• Service members facing relocation due to a Permanent Change of Station Order are eligible to be considered for alternative to foreclosure options offered by Freddie Mac, including a modification under the Home Affordable Modification program.
  • When evaluating distressed service members who are subject to the SCRA for HAMP, Servicers must use the:
    • Interest rate in effect on the note prior to the borrower receiving the SCRA relief when determining if the borrower is eligible for HAMP.
    • Borrower's monthly contractual payment amount in effect on the note prior to receiving the SCRA relief when evaluating the borrower’s current monthly housing expense-to-income ratio and determining whether it is above or below 31 percent.

Resources related to the SCRA:

• Single-Family Seller/Servicer Guide (Guide) Bulletin 2010-32
• Guide Bulletin 2011-1
• Guide Bulletin 2011-23
• Guide forms required when selling or servicing a mortgage for a service member
  • Form 105, Multipurpose Loan Servicing Transmittal
  • Form 1066, SCRA Accounting Data Form
  • Form 1071, Supplemental Accounting Report of SCRA Mortgages

We'd like to remind Servicers that under no circumstances should you place loans of active duty service members, or those who have been released from active duty within the past nine months, into foreclosure without Freddie Mac approval. Please ensure that you explore all relief options available.

If your borrowers require additional relief than what is currently available, please contact your Loss Mitigation representative. We can work together to develop relief solutions that assist service members and help them keep their homes.