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#318288 - 02/18/05 01:45 AM SCRA ---First Installment Payment on Auto Loan
MikeD Offline
Junior Member
Joined: Jul 2004
Posts: 30
Los Angeles
Here is a question which I come upon fairly frequently, which I have not seen addressed. According to SCRA regarding installment contracts, the servicemember must make a "deposit or installment" payment BEFORE entering service to qualify. Frequently, we purchase loans where the customer enters service before he makes his first payment to us (or at least receives his orders before the first payment is made). My question is what "deposit or installment" means here. If he put a down payment on the car, is that considered a deposit on the loan? If he didn't put a down payment, and is called to active duty before making the first payment, does he then NOT qualify for SCRA? Thanks for your thoughts.

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Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#318289 - 02/21/05 05:04 PM Re: SCRA ---First Installment Payment on Auto Loan
Don_Narup Offline

Power Poster
Joined: Jul 2001
Posts: 3,708
Las Vegas Nevada
You are eligible for a rate reduction under the SCRA if:
You signed the contract for the vehicle before you were called to, inducted, or enlisted in active United States military service,

I don't find anything that indicates a payment has to be made in order to qualify for 6% rate reduction.

In the event of REPOSSESSION the reg says The SCRA gives certain protections against repossessions for installment contracts (including automobile leases). If the contract was entered into before going on active duty and at least one payment was made before that time, the creditor cannot repossess the property, while the member is on active duty, nor can they terminate the contract for breach, without a court order.
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#318290 - 02/22/05 02:21 AM Re: SCRA ---First Installment Payment on Auto Loan
MikeD Offline
Junior Member
Joined: Jul 2004
Posts: 30
Los Angeles
You're right. I misinterpreted that. Thanks. It gets a little frustrating, as a subprime lender, that we have folks who know they are going on active duty taking advantage of the situation by taking on debt before they are officially called up, then looking for protections in SCRA, and not just for the rate, but to avoid collection and repossession. I have had many customers tell me this directly---that they have no intention of paying and they know SCRA will protect them, and it won't matter later on because they will be done with (the car, in my case).

I also have had customers and recruiters admit to me that recruiters use SCRA as a tool---i.e., join up for the protections. It is a shame because I really want to help those who are serving, and more often than not (for the people who really got caught in this), I go far beyond the basic protections of SCRA and do whatever I can to help them.

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#318291 - 02/23/05 01:23 AM Re: SCRA ---First Installment Payment on Auto Loan
Don_Narup Offline

Power Poster
Joined: Jul 2001
Posts: 3,708
Las Vegas Nevada
If I had the name of a Recuriter of any service that was using that I would write a huge complaint letter to their CO and right up the chain of command.

I would also indicate that if no action was taken I would be writing a letter to the editor, and calling local TV stations complaing that this service was knowingly cheating private business.

What they are not telling the kids is that they are not exempt from reporting the delinquency plus the repo and defficiency balance when they are no longer in the service to the credit bureau which will show for 7 years
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