If a mortgage servicer grants relief to a uniformed service member under SSCRA, but the lienholder (investor) demands remittance at the Note rate, would Section 513 of the Act extend to the servicer? In this case the lienholder rejected the mortgagor's claim for relief without cause . . .

I would believe the lienholder is entitled to income at the note rate, which is currently 6% per Federal law, the SSCRA. I can't imagine there is any requirement on the servicer to eat that difference.

The SSCRA governs the rate the borrower can be charged on pre-service obligations during the period of military service. The contract between the servicer and the mortgage holder would dictate what the servicer must pay to the mortgage holder. Theoretically, the mortgage holder's contract should not give them a right to collect anything from the servicer that the servicer cannot collect from the borrower -- but it's a good reason to pull out the servicing contract documents to see precisely how they're worded.

Section 513, which you reference, provides protection to persons secondarily liable on an obligation. It is not designed to protect a lienholder. It provides, in pertinent part:

Sec. 513. Protection of persons secondarily liable
(1) Whenever pursuant to any of the provisions of this Act
(sections 501 to 593 of this Appendix) the enforcement of any
obligation or liability, the prosecution of any suit or proceeding,
the entry or enforcement of any order, writ, judgment, or decree,
or the performance of any other act, may be stayed, postponed, or
suspended, such stay, postponement, or suspension may, in the
discretion of the court, likewise be granted to sureties,
guarantors, endorsers, accommodation makers, and others, whether
primarily or secondarily subject to the obligation or liability,
the performance or enforcement of which is stayed, postponed, or
suspended.

Thank you both for your replies.

I am fan, having followed your postings and/or articles on this site and elsewhere.

But is it too much of a stretch to claim that the servicer, acting as a financial intermediary between the lienholder and the service member, is also protected by SSCRA? Since under our servicing agreement (I am reviewing these thoroughly) we have agreed to remit an interest rate equal to the Note rate to the investor and in effect making us secondarily liable for interest payments to the lienholder?

Or am I grasping at straws?

OK, I said "I can't imagine". Now I'll ask, "what were you thinking"? I suppose you used their form?

I'd consult counsel and look for an out as this may cost you mega-bucks over the years. I am not an attorney, but I think you grasped the short straw.

Thanks for the responses. When it is resolved, I'll share a web site address that is an interesting read about this investor's SSCRA practices.

junk