WASHINGTON – Aug. 29, 2014 – The Obama Administration announced a new agreement this week with five of the nation's largest banks aimed at helping active-duty military service members save hundreds of dollars or more each year on their mortgage.

Under a 2003 law, active-duty service members can have their mortgage rates and some of their other debt fees capped at 6 percent. However, many military members aren't taking advantage of benefits that could lower their mortgage payments.

Recent research from the Government Accountability Office (GAO) found that many military service members don't take advantage of the benefits available under the Servicemembers Civil Relief Act, either because they're unaware of them or they don't want to complete the paperwork.

To counter that, "we're announcing a new partnership in which some of America's biggest banks and financial institutions will simplify the process, proactively notify service members who qualify for lower rates and make it easier to enroll," President Barack Obama told veterans while speaking at the American Legion National Convention this week. "In other words, we're going to help more of our troops and military families own their own home without a crushing debt."

Five of the nation's largest mortgage lenders – Wells Fargo, Bank of America, Ocwen Loan Servicing, CitiMortgage and Quicken Loans – have agreed to make the process easier and take a more proactive approach to reaching those who are eligible. The five lenders are pledging to make frequent checks of the Defense Department database to see if their customers qualify for any unclaimed benefits.

"Our preliminary analysis suggests that this new partnership will help tens of thousands of military families save money by reducing their mortgage interest rates," writes Jeff Zients, National Economic Council director, in a blog post on the White House website. "On a $200,000 mortgage, even an interest rate reduction of only one percent will result in over $1,500 a year in savings for our military families – money they can put towards daily expenses, retirement savings, or sending their children to college."

Source: "White House Announces Program to Lower Military Mortgage Payments," TIME (Aug. 26, 2014)

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