For two years, U.S. Army reservist Diana Zschaschel has been fighting foreclosure against the West Los Angeles condo she shared with her husband, citing the Servicemembers Civil Relief Act, which protects active military personnel from financial hardship while on duty.
Zschaschel and husband Paul Garcia have filed a lawsuit against Bank of America, which claims was exempt from abiding by the Servicemembers Civil Relief Act because Zschaschel wasn’t eligible for the protection at the time.
"It's disgusting and it makes me ashamed to be an American," Garcia said as he looked around at what's left of his condo. The bank’s "stance is, you should’ve known better."
The foreclosure went through in May 2011 while Zschaschel was in a two-week training course in San Diego. Since then, she’s been battling the bank for a loan modification.
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"If they're willing to do this to me, they're willing to do this to anybody," said Zschaschel, a U.S. Army dentist.
The Servicemembers Civil Relief Act protects active military personnel from financial hardship while on duty and specifically denies banks the ability to foreclose on a property during that time.
Zschaschel said she's willing "to embarrass myself and expose my personal situation to help other people going through the same thing. Because it sucks."
In a statement to NBC4, Bank of America said it checked Zschaschel’s status with the Department of Defense. Because she was in her two-week training, the bank said, the U.S. Army dentist was not considered active military and therefore she did not qualify for the benefits.
An NBC4 investigation into the code found that "active duty" does include training, a point now under scrutiny in the lawsuit filed by Zschaschel against the bank.
The following is a direct quote from Section 101(d)(1) of Title 10 of the United States Code:
(d) Duty Status. - The following definitions relating to duty status apply in this title:
(1) The term "active duty" means full-time duty in the active military service of the United States. Such term includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. Such term does not include full-time National Guard duty.
In 2011, Bank of America settled with the U.S. Department of Justice for violating the Service Members Civil Relief Act and had to pay $20 million to 160 members of the military who had faced foreclosure. It was the largest settlement regarding the SCRA to date.
Similar cases against CityBank and Chase Bank have also been settled.
Below is Bank of America's complete statement to NBC4:
We appreciate the tremendous sacrifice made by our men and women in uniform and their families, especially during times of deployment. We work hard to ensure our military customers receive high quality service that caters to their unique needs. When we find mistakes, we address them. We are confident our current practices comply with – or exceed – SCRA requirements. Ms. Zschaschel was reviewed for a modification on more than one occasion. We moved forward with the foreclosure once that review was completed. Throughout the foreclosure process, we checked Ms. Zschaschel’s status with the Department of Defense and she was not listed to be in active military duty status.
The Servicemembers Civil Relief Act (SCRA) provides protection for active military duty. We have asked her counsel repeatedly for documents proving that she was in active military duty and we have not received information to validate her claim. Notwithstanding, we understand that she was a member of the US Army Reserves, and that she had been called to perform annual two week training in May 2011. Members of the guard component may be eligible for SCRA benefits and protections provided that they are called to duty by order of the President of the Secretary of Defense for a period of 30 consecutive days or more. The two weeks of training that Ms. Zschaschel undertook would not qualify her for benefits under the SCRA.
If Ms. Zschaschel believes that the information with the Department of Defense is inaccurate, she should contact the Department of Defense to correct her status during that time. If the status is changed, we will resolve the situation.