Bank of America and Morgan Stanley allegedly foreclosed on military personnel without first obtaining court orders - including some who suffered severe injuries.  It will cost them over $22 million.  BofA will pay $20mn will MS will owe $2.35mn. 

A Bank of America unit is said to have improperly foreclosed on some 160 members of the military between 2006 and 2009.  Morgan Stanley’s Saxon Mortgage Services unit improperly foreclosed on 17 service members during the same period.  The foreclosures violated the Service members Civil Relief Act, which was enacted to shield deployed military personnel from financial stress, according to the Justice Department.

Most of the BofA cases involved loans originated by Countrywide and the improper foreclosures were taken or started by Countrywide prior to BofA's acquisition of the company.  Both firms expressed sincere regrets.

Last month, JPMorgan Chase agreed to pay $27mn to about 6,000 active-duty military personnel who had been overcharged on their mortgages.  The bank cut interest rates on soldiers’ home loans and returned homes that were wrongfully foreclosed upon.  JPMorgan CEO Jamie Dimon made the apology.   [Bloomberg, 5/26/11]