A U.S. Marine Corps veteran who faced foreclosure on his Vancouver home while serving in Iraq has filed a lawsuit against the home’s lender, saying that the company violated a federal law that provides mortgage relief for active-duty military members.
In the federal lawsuit, Vancouver resident Jacob McGreevey is seeking $500,000 or an amount determined at trial from PHH Mortgage Corp. of New Jersey. That company, with HSBC Bank USA as trustee, foreclosed on McGreevey’s Hazel Dell home in September 2010, shortly after the Marine returned from active duty in Iraq.
According to the lawsuit, PHH Mortgage launched its foreclosure action against McGreevey in May 2010, after McGreevey had been called up from the Marines Reserve to active duty. The lender ignored McGreevey’s request upon his return to Vancouver two months later to attempt to refinance the home, instead posting a series of foreclosure notices on his garage door before foreclosing on the home.
The lawsuit alleges that PHH Mortgage violated the Servicemembers Civil Relief Act, by initiating foreclosure proceedings after McGreevey had been called to active duty without taking steps required by the act to reduce foreclosure risk.
The federal law sets a 6 percent interest limit on credit obligations that takes effect when a person is called into active duty. The lawsuit alleges that McGreevey’s debt obligation was not lowered and that the lender failed to obtain a court order before the sale and foreclosure of McGreevey’s home, as required by the federal act.
The lawsuit, which requests a jury trial, was filed May 6 in the U.S. District Court in Tacoma by Portland attorney Sean Riddell, who served in the Marines with McGreevey.
PHH Mortgage Corp. said in a statement: “We take our commitment to helping all distressed homeowners very seriously and work closely with our customers to identify potential home retention options whenever possible, as we did with Mr. McGreevey. We look forward to all of the facts coming to light during the next steps of the legal process.”
McGreevey, 34, purchased the house at 7818 N.E. 24th Court in April 2004 with a $134,100 mortgage. He was recalled to one year of active duty in Operation Iraqi Freedom on June 1 of that year.
McGreevey refinanced the home in December 2006 with a $160,000 loan processed through PHH Mortgage. He returned to active duty in May 2009 and requested adjustment of his interest rate before being called to duty, according to the lawsuit.
But in May 2010, the home’s lender initiated a claim that led to the foreclosure.
McGreevey said in an interview that he was unaware until he returned from duty that a family member he’d left in charge of his financial affairs had gotten behind in the loan payments. He was able to live in the house for a short time before it was foreclosed. He now lives in a rented home.
He described the foreclosure as “detrimental to my personal life,” and said it led to his decision to return to a fourth tour of active duty. “The hardest part was just coming home and losing your home,” he said.
Editor’s note: this story has been updated to include a subsequent statement by PHH Mortgage Corp.