I am not that experienced with Servicemembers Act and need some assistance. We have a loan that was made in 2006 to a servicemember who was already on active duty prior to the loan. Would this loan be subject to the Act since he was already on active duty? Also, the loan is now up for renewal and it appears that the appraised value (lot loan) will not meet our LTV requirement. Is a forebearance allowed under the Act or does the Act still apply?

The 6% rate limitation does not apply to servicemembers that were active duty at the time the loan was made, however all other stays and restrictions would apply.

You will have to go through the proper legal channels to begin your foreclosure process if you are not willing to work with the servicemember on the refinancing.

Thanks Dan, would we be able to do a forebearance agreement instead of going the route for foreclosure?

The servicemember can waive certain restrictions but in the case of foreclosure on real property I would highly recommend that any and all legal documents be drawn up and handled by legal counsel. You need to be absolutely sure that all documents meet all the requirements of the SCRA and that any waiver or forebearance agreements conform to any legal requirement to waive the stay under the SCRA.