An Iraq War veteran has filed a potential class-action lawsuit against CitiGroup’s CitiMortgage division, alleging that the lender violated the Servicemembers Civil Relief Act by foreclosing on his home and that of “thousands” of other active-duty soldiers.

The lead plaintiff in the case bought a home in Texas in 2003. CitiMortgage later took over the loan from the original lender and ultimately foreclosed on the property, selling it at auction. The lawsuit states that the foreclosure occurred while the plaintiff “was engaged in a period of military service in the Texas Army National Guard or was otherwise entitled to the protections of the Servicemembers Civil Relief Act.”

From the suit:

While [the plaintiff] was on lock down training at Fort Hood, CitiMortgage initiated foreclosure proceedings against his property and sold it at a foreclosure sale on May 2, 2006. The foreclosure sale was not conducted pursuant to a court order and was not approved by a court. That same day, CitiMortgage’s lawyers filed an affidavit in the real property records of Travis County, Texas, stating that [the plaintiff] was ‘not on active duty with any branch of the Armed Forces of the United States or w[as] not protected by the Servicemembers Civil Relief Act.’ Those statements were false.

The SCRA protects active members of the Armed Forces, including the National Guard. According to the suit, “lenders may not foreclose on a covered servicemember’s mortgage while he or she is on active duty, or within a specified grace period thereafter, without court approval.”

“This was not an isolated incident,” says the plaintiff, who seeks class-action status for the suit. “From Dec. 19, 2003 to date CitiMortgage initiated thousands of foreclosure proceedings across the United States without adequate safeguards to ensure that servicemembers on active duty were not targeted by CitiMortgage’s foreclosures.”

Class Claims CitiMortgage Illegally Foreclosed on ‘Thousands’ of Servicemembers’ Homes [Courthousenews.com]

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