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#21132 - 09/10/02 04:03 PM Re: Soldiers and Sailors Relief Aact
Lestie G Offline

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We're all firmly behind our troops, and want to help out in any way we can. The reality, however, is that we still have to comply with the law, keep our past dues under control, and answer to Boards, regulators and shareholders regarding our performance. Unfortunately, we can't just not worry about someone not making payments.

This is a confusing issue. I for one appreciate hearing how people across the country are handling these situations so that the service men and women benefit as intended, but the bank is not harmed.
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#21133 - 09/10/02 04:15 PM Re: Soldiers and Sailors Relief Aact
Andy_Z Offline
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The situation can be different from case to case. Some folks are activated and served in the US and even at home, at a local military post or airport, as examples. And some may go overseas to serve. Some will be paid more than before, and some less. Some have intentions of paying what they can, when they can, and some hide behind this as a shield.

RANT AHEAD: Would you propose unilateral extensions to keep it off the past dues and to not be reported derogatory? What if you had 100 of these loans? How much forbearance should the bank accept and for how long, 1 year, 2 years, more?

I apologize if it sounds like I am attacking, I am not. I am patriotic as is my bank. But I feel that the intent of the law was to act as an equalizer when someone gave up a good civilian living to serve their country at a lower pay.

But I see abuses where someone actually improves their income and living conditions and thumbs their nose at the creditor. It is those cases I dislike.
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#21134 - 09/10/02 07:35 PM Re: Soldiers and Sailors Relief Aact
Lestie G Offline

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Hear, Hear! And unless I'm mistaken, you've served in the military, and know whereof you speak! Thanks for sharing that knowledge.
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#21135 - 09/10/02 09:09 PM Re: Soldiers and Sailors Relief Aact
Nascar Fan Offline
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I am one of the "lucky" ones that have had the borrower thumb his nose at us. He refuses to pay the debt that is due. We have decided to wait until he is out of the service and then pursue the matter.

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#21136 - 09/11/02 01:19 AM Re: Soldiers and Sailors Relief Aact
rlcarey Online
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I would suggest that you contact his base and find his CO and let him know that this soldier is shirking his responsibility. They frown on that big time and I had one CO tell a solder to pay-up or he was going to throw him in the brig. While the Armed Services fully supports the troops in their rights under SSCRA, I'll bet you top dollar if you get a hold of his CO, you'll see a different attitude.
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#21137 - 09/11/02 01:53 AM Re: Soldiers and Sailors Relief Aact
Andy_Z Offline
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A search here will reveal my cite of an Army regulation that all but requires them to pay just debts and I believe it was Don who gave some info about the Marines (I didn't say jarheads, Don) that would be helpful. But honestly, it does depend largely on the chain of command.
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#21138 - 09/11/02 04:38 AM Re: Soldiers and Sailors Relief Aact
Don_Narup Offline

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Having had to collect loans from navy/marine corp personnel, I found a little boost from the right source often solved the problem. Most 1st Sgts and Co's are very helpful, and a very few are not.

Sending a "Letter of Indebtedness" to a CO is useful. A "Letter of Indebtedness" is a letter to the CO that states your customer has a obligation which is currently $xxx past due. While you appreciate the customers contribution to our national security, there is a responsibility on his part to pay the obligation he contracted for. You will appreciate any help in getting xxxx to establish a mutually satisfactory arrangement for payment.

Having these types of letters in a personel file will prevent someone from getting a security clearance, possible promotion to an NCO rank, and are not taken lightly.

Better yet, call the units 1st Sgt. Express that you have tried to work with customer XX and even reduced payments under SSRA but receive no cooperation. Ask if customer xx is a good soldier, salior, marine etc. If the answer is yes say you would hate to write the CO and perhaps jeprodize this persons military career, could the 1st Sgt recommend a course of action that would keep this person out of trouble, as you are just looking for a mutually satisfactory solution for payment of the obligation.

If the answer is no he isn't, your home free as the 1st SGT is looking for ways to make his life miserable. anyway.

Collection methods are limited, so use what is available.

Make sure you flag the credit bureaus.

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#21139 - 09/11/02 01:05 PM Re: Soldiers and Sailors Relief Aact
complyguy Offline
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Don - would a letter of indebtedness pass GLB and FCRA? It appears to me that the CO would be a nonaffiliated third party (non-CRA) to whom we would be reporting nonpublic personal information.

I feel like I'm tap dancing in a minefield to question your response, but I don't see how that SSCRA procedure is compatible with newer regs. Help?

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#21140 - 09/11/02 01:39 PM Re: Soldiers and Sailors Relief Aact
Dan Persfull Offline
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Rclary is correct, I use to do collections on Fort Leonardwood, MO (back in the early 70's) and the CO can be of great help, especially if their rank was E-7 or higher.
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#21141 - 09/11/02 03:14 PM Re: Soldiers and Sailors Relief Aact
Don_Narup Offline

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complyguy
I'm not qualified to give a legal opinion and its something you would have to obtain. My opinion is that the letter could be worded in such a way that no violation of GLB would occur.

You could always write the customer and indicate you do not want to have to contact his CO in order to obtain arangements for past due payment. Sometime the mention of that possibility to the customer will get them to act.

There are not a lot of options available to collect from someone in the service. I found the best one to be a willingness to work with the customer. This is good guy collection as opposed to being bad guy collector. Stress that they have an obligation to contact you, and not for you to contact them.

Try and work out having an allotment check sent to the bank each month.

Most just need some kind of a kick to get started paying, and a sense that someone at the bank will help, as long as they hold up their end of what ever arrangements are made.

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#21142 - 09/11/02 05:35 PM Re: Soldiers and Sailors Relief Aact
complyguy Offline
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Good points, Don. We haven't had negative SSCRA experience so far, but we'll file your suggestions for future reference, just in case.

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#21143 - 09/24/02 09:12 PM Soldiers and Sailors Relief Act
ccsla Offline
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I need some help!! We have a loan at 8% and we are lowering the rate to 6%. What should we do with the 2% reduction? Deferred until the borrower is not in active duty and add back to principal? Make a new note? Write the interest off? Please advise!!! Thanks.

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#21144 - 09/24/02 09:16 PM Re: Soldiers and Sailors Relief Act
rlcarey Online
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You get the "opportunity" to forgive that interest in exchange for the soldier fighting for your country!
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#21145 - 09/24/02 09:31 PM Re: Soldiers and Sailors Relief Act
Andy_Z Offline
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I think it was RL who believed "Greetings" would be a cheery way to soften the blow that many young men were being given the "opportunity" to serve their country.

And he is correct. 8% - 6% = 2 less than you were going to get. There is no adding it back and you can't show it as a charge off against the service member. You also should look at the definitions so that you are not going after late fees, as that is interest and would exceed your cap if you are already there.
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#21146 - 09/25/02 10:38 AM Re: Soldiers and Sailors Relief Act
Richard Insley Offline
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I agree with RL and Andy, but would add that strict accounting procedures may dictate that you book some form of write-down of the asset's value.

Although it does not apply directly, the Federal TIL reimbursement guidelines offer concepts for adjusting loans in order to correct rate disclosure errors. The lump sum calculation in your case would be the present value of the difference between the original payments at 8% and payments at the reduced 6% rate. You would only apply this calculation for the number of payments you expect the GI to be on active duty (which could be the remaining term of your loan.) Accompanied by corresponding reductions in the GI's interest rate and payment amounts, this lump sum would be the amount you would need to write down in order to mark the loan to "market."

In no way should this write down reflect badly on the GI.
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#21147 - 09/25/02 04:31 PM Re: Soldiers and Sailors Relief Act
rlcarey Online
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Richard - How do you "write down" a simple interest loan?
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#21148 - 09/25/02 06:05 PM Re: Soldiers and Sailors Relief Act
BankerInAL Offline
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Andy

You mentioned that late charges were considered finance charges under SSCRA. If we charge a 6 percent rate, we cannot assess late charges? Basically, we need to "turn off" the assessment for the time they are on active duty. What about annual fees on HELOC's or collections charges (atty, court cost, etc)?

Thanks!

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#21149 - 09/25/02 09:04 PM Re: Soldiers and Sailors Relief Act
Gotwood Offline
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Sec. 526 makes it pretty clear that additional charges are prohibited.
"As used in this section the term "interest" includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) in respect of such obligation or liability.

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#21150 - 09/25/02 10:08 PM Re: Soldiers and Sailors Relief Act
Andy_Z Offline
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Sorry for the delay, I am out of town. Dean has the straight scoop.
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AndyZ CRCM
My opinions are not necessarily my employers.
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Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#21151 - 10/01/02 04:41 AM Re: Soldiers and Sailors Relief Aact
Anonymous
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If you need to look the act up, it is correctly known as the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.

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#21152 - 02/13/03 07:05 PM Re: Soldiers and Sailors Relief Aact
Anonymous
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A bank customer is asking for relief under SSCRA. When she applied for a moble home loan she was not married and was the only signer on the note. Since than she has married and relies on her husband's income to make payments. (He is not on the note) Her husband has been called to active duty. Can we honor her request?

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#21153 - 02/13/03 07:13 PM Re: Soldiers and Sailors Relief Aact
Dan Persfull Offline
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Can you honor her request? Yes you can. Are you obligated to do so? No, if he's not obligated on the loan. It's my understanding the SSCRA only applies to loans that the military person has a contractual obligation on.
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