Bottom line, your loan officer is wrong. SSCRA does apply to this situation. While working for the National Guard, your customer is not on federal active duty orders. Now that she has been called to active duty on federal orders, this triggers SSCRA protections. However, this does not mean there is an automatic interest rate reduction. Remember, you can attempt to rebut the interest rate reduction if you can show that the call to active duty will not materially affect her financial situation. Since her pay will probably not change at all (actually may increase if there is hazardous duty pay involved), you might could make a case here. But be very careful and consider all the ramifications before you take this approach. You do have some risk in taking this approach, even if you successfully avoid the interest rate reduction. First, the burden of proof is on you, the financial institution, to prove there is no material impact to her financial situation. Second, there is the reputation risk issue - you probably don't want to be seen as a bank that sticks it to soldiers called up to defend our country in war.
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions