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#2258954 - 08/30/21 07:39 PM Repo and Active Status
TeamComply Offline
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Borrower applies for loan, MLA hit on credit bureau, no reference to military occupation on credit application. Loan is a first payment default. SCRA search was ran and shows borrower is active duty since 2008 and still serving. I was told by someone in the bank, that since they entered into this contract while they were on active duty, self-help repossession is allowed, without a court order. Is this correct?

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Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#2258999 - 08/31/21 03:06 PM Re: Repo and Active Status TeamComply
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
If the borrower was a servicemember when they entered into the contract then you would not need a court order to repossess.

https://www.servicememberscivilreliefact.com/blog/vehicle-repossessions-under-the-scra/

no reference to military occupation on credit application . . . .SCRA search was ran and shows borrower is active duty since 2008 and still serving.

I might do a little more digging since he has supposedly been active duty for the past 12-13 years.
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#2259027 - 08/31/21 04:57 PM Re: Repo and Active Status TeamComply
TeamComply Offline
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Thanks Dan, appreciate the response. What do you suggest/mean by "I might do a little more digging since he has supposedly been active duty for the past 12-13 years" ??

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#2259029 - 08/31/21 05:05 PM Re: Repo and Active Status TeamComply
rlcarey Offline
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rlcarey
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Galveston, TX
If they have been on active duty for that long - how can the application not reflect/support that? 1+1 is not equaling 2
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#2259035 - 08/31/21 05:30 PM Re: Repo and Active Status TeamComply
TeamComply Offline
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The application was submitted from a car dealership (indirect auto loan), I reviewed it again and there is no indication he is active duty (no employment/income information reflects this on the application form). The copy of the DL we obtained issued in 2017 stays "Veteran" and there is an existing automobile trade listed on the credit bureau (opened in 2018) that includes a remark that says "Active Military Duty" and as stated prior, the MLA search built into the credit bureau report indicates "Military Lending Act Search: Match Found" this bureau was pulled the same day as the application. This is all I see in the loan file regarding military/active duty.

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#2259605 - 09/12/21 01:08 PM Re: Repo and Active Status TeamComply
Andy_Z Offline
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Andy_Z
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I suppose it doesn't surprise me its a first payment default if the bank was not aware of where the borrowers income was from. And I'd consider reviewing a sampling of this dealers other paper with you. Its not smelling good. Past experiences make me skeptical of a lot of dealer paper. Assuming it was a good purchase you'd be exempt from MLA requirements, but I'd look at that sales agreement.

The MLA and SCRA databases are different, but at the core and for the servicemember the results should be the same as to their status. When the CB says active duty but the app shows no employment or income, questions should be asked. Since you're asking about repo'ing I assume this is nonrecourse paper so underwriting is more important.
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