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Mortgage company to pay $750,000 to six military service members for illegal foreclosures

Military service members are protected from home foreclosures under certain circumstances.

A sign advertising a public auction for a foreclosed home in Las Vegas.
A sign advertising a public auction for a foreclosed home in Las Vegas.Read moreRONDA CHURCHILL / Bloomberg

PHH Mortgage Corp., of Mount Laurel, has agreed to pay $750,000 to six military service members to settle allegations that it foreclosed on their houses between 2010 and 2012 without obtaining required court orders, the U.S. Attorney for New Jersey said Wednesday.

A federal law called the Servicemembers Civil Relief Act prohibits foreclosures on the home of a service member during active military service and one year thereafter without a court order if the service member took out the mortgage before joining the military.

The investigation was prompted by a complaint received in 2016 through the U.S. Department of Justice’s Servicemembers and Veterans Initiative.

Each of the six service members, who still need to be located by the federal government, will receive $125,000. PHH also agreed to train staff to prevent unlawful foreclosures in the future.

“We take our responsibilities to assist service members very seriously, and we regret whenever any customer experiences a hardship that could be avoided," PHH spokesperson Dico Akseraylian said. He also said that federal officials reviewed “PHH’s entire portfolio of non-judicial foreclosures from January 2010 to September 2018 and identified six potentially adversely affected service members.”