Military Spouses and Foreclosure: Rights You Should Know

Military spouses face unique foreclosure challenges. When the service member is deployed, the spouse at home may be managing the mortgage alone on a reduced family income. When the couple PCSs (permanent change of station), they may struggle to sell the old home and end up with two mortgages. When the service member is injured or killed in the line of duty, the surviving spouse may face foreclosure while grieving. The law provides protections for military spouses in all of these situations — but many spouses don't know what's available.

SCRA protections extend to jointly-owned property. If the military spouse is a co-borrower on the mortgage or a co-owner of the home, the SCRA's court-order requirement, 6% rate cap, and stay provisions apply to the entire property — not just the service member's share. This means that even if the foreclosure is ostensibly against both spouses, the lender must still obtain a court order if the mortgage was originated before the service member's active duty began. The spouse at home can assert this protection on behalf of the absent service member.

A durable power of attorney is one of the most important documents a military family can have. When the service member is deployed, a properly executed power of attorney allows the spouse at home to manage the mortgage, communicate with the servicer, sign documents, and pursue loan modifications or other loss mitigation options. Without it, the spouse may be unable to take action — and crucial deadlines can pass while waiting for the deployed service member to sign documents. Every military family should have a durable power of attorney in place before deployment, and it should specifically grant authority to handle real estate and mortgage matters.

The Military Spouse Residency Relief Act (MSRRA) also has important implications for foreclosure. Under MSRRA, a military spouse who moves to a new state with the service member under military orders can retain their original state of legal residence for tax purposes. This can affect state income tax rates, property tax exemptions, and eligibility for state-specific homeowner assistance programs. If your spouse is deployed or stationed in a different state, you may have the option of choosing which state's laws and programs apply — and that choice can affect your foreclosure defense strategy.

Surviving spouses have additional protections. Under the SCRA, the 90-day post-service foreclosure protection extends to surviving spouses in certain circumstances. The VA offers specific foreclosure prevention assistance to surviving spouses of veterans who died in service or from service-connected disabilities, including the ability to assume the VA loan and request VA loan technician assistance. The HUD Mortgagee Letter 2015-03 also provides reverse mortgage foreclosure protections for surviving spouses of HECM borrowers.

If you're a military spouse facing foreclosure — whether your service member is deployed, stateside, or unfortunately deceased — you have rights. You have power in this situation. Contact us for a free, confidential case review. We'll help you understand exactly what protections apply and take the first steps to save your home.