But there are options. Some military members may be subject to protections under the “Servicemember's Civil Relief Act“ (SCRA) of 2003, but most are not. This article addresses those protections and highlights other options outside the SCRA that all military homeowners should be aware of.

The SCRA applies to military members who entered into a mortgage prior to coming on active duty. This includes mortgages incurred jointly with a spouse. It also applies to reservists who were ordered to active duty as well as Guardsmen called to active service for more than 30 consecutive days.

The SCRA stipulates that when a military member so requests in writing, the mortgage lender must reduce the interest rate on their mortgage to no more than 6 percent per year for the entire period of their active duty service. This means they must calculate the member's payments in accordance with the lower rate as of the date the member began active duty service. Under the SCRA, they cannot keep the payment the same and just shorten the length of the mortgage.

Furthermore, under the protections of the SCRA, mortgage lenders may not foreclose, or seize property for a failure to pay a mortgage debt, while a service member is on active duty or within 90 days after the period of military service unless they have the approval of a court.

It is important to note that even though a military member may meet the requirements to qualify, the SCRA only applies if the servicemember's ability to repay is materially affected by their entry into active duty. If the lender wants to deny the member's request to lower the interest rate, it is the lender's responsibility to make their case through legal proceedings.

Regardless of whether the SCRA affects them or not, service members repaying their mortgages have other options. The U.S. Department of Housing and Urban Development (HUD) has published materials outlining the steps to take. They advise the following:

Since foreclosure is usually very expensive for lenders, they want to avoid it as much as the homeowner. They have further incentive to work with borrowers who are facing money problems because HUD⁄FHA and private mortgage insurance companies require it. For anyone in financial trouble, it is always wisest to contact one's lender sooner rather than later. The longer one waits, the fewer the options. As with most anything else, there are no guarantees. However, most lenders will help borrowers at least explore the options. But the borrower also has to be willing to put forth the effort to work with the lender. It's a two-way street and examples where abound lenders don't hear from the borrower and begin the foreclosure process.

If a service member has an FHA loan, HUD's National Servicing Center offers a number of options for borrowers who have FHA insured loans to include loan modifications and special forbearances.

If a service member is either not getting anywhere in their attempts to talk to their lender or doesn't feel comfortable doing so, they can get assistance through a HUD-approved housing counseling agency. Counselors at these agencies can help service members evaluate their finances and come up with appropriate options. They can also help service members negotiate with lenders and may even call lenders for them to discuss a workout plan.

While the counselors at HUD-approved housing counseling agencies will help anyone establish a monthly budget that considers their financial situation, military members can also access this assistance through their local family service center, such as the Air Force's Airman and Family Readiness Centers. Once an analysis of the servicemember's finances is complete, it can be used to figure out how much mortgage payment they can actually afford, which is key to choosing the best course of action when dealing with a lender.

Interested service members can access the list of HUD-approved housing counseling agencies and their services by calling 800-569-4287 on weekdays between 9 a.m. and 5 p.m. EST. They can also get an automated referral to the three closest housing counseling agencies by calling 800-569-4287. The HUD Web site, www.hud.gov, is the definitive resource for information on this subject.

For borrowers who are unable to keep up their mortgage payments, possible loan workout solutions listed on the HUD Web site include the following:

Reinstatement: A lender is always willing to discuss accepting the total amount owed to them in a lump sum by a specific date. They will often combine this option with a forbearance.

Forbearance: A lender may allow one to reduce or suspend payments for a short period of time after which another option must be agreed upon to bring a loan current. A forbearance option is often combined with a reinstatement when one knows they'll have enough money to bring the account current at a specific time in the future. The money might come from a hiring bonus, investment, insurance settlement or tax refund.

Repayment Plan: One may be able to get an agreement to resume making their regular monthly payments, in addition to a portion of the past-due payments each month until they are caught up.

Mortgage Modification: If one can make the payments on their loan, but do not have enough money to bring their account current or cannot afford the total amount of their current payment, their lender may be able to change one or more terms of the original loan to make the payments more affordable.

Sale: If one can no longer afford their home, the lender will usually agree to give them a specific amount of time to find a purchaser and pay off the total amount owed. They will be expected to obtain the services of a real estate professional who can aggressively market the property.

Pre-Foreclosure Sale or Short Payoff: If the property's sales value is not enough to pay the loan in full, a lender may be able to accept less than the full amount owed. This option can also include a period of time to allow their real estate agent to market the property and find a qualified buyer. Monetary help may also be available to pay other lien holders and⁄or help toward paying a few moving costs.

Assumption: A qualified buyer may be allowed to assume a mortgage, even if one's original loan documents state that it is nonassumable.

Deed-in-Lieu: A lender may agree to allow one to voluntarily “give back“ their property and forgive the debt. Although this option sounds like the easiest way out, generally, one must attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. Also, this option may not be available if one has other liens such as judgments of other creditors, second mortgages, and IRS or state tax liens.

For specific information about the SCRA, service members should contact their local legal assistance office. For assistance with evaluating personal finances and budgeting matters, service members should contact their nearest family service center (in the Air Force, the Airman and Family Readiness Center). The phone number for Bolling's Airman and Family Readiness Center is 202-767-0450.