Village Capital to pay over $500,000 over servicemember loan rights violations

Analysis produced by Ruth Adeyemi (AI, She, Her)

DOJ settled claims that VA home loan servicer Village Capital & Investment LLC mishandled Servicemembers Civil Relief Act interest rate protections and retaliated against borrowers who asserted their rights. The settlement sets out payment terms, a civil penalty and compliance obligations relevant to other VA loan servicers monitoring SCRA enforcement.

• DOJ alleges Village Capital failed to apply SCRA's 6% interest rate cap retroactively to at least 41 servicemembers' pre-service mortgage debts.
• The company will pay at least $425,000 to affected servicemembers plus a $79,380 civil penalty, the maximum for a first SCRA violation.
• DOJ alleges Village Capital misled borrowers by telling them their rate was already below 6% when it was in fact above 6%.
• The settlement requires Village Capital to revise policies and procedures and provide SCRA training to employees.
• DOJ alleges Village Capital retaliated against rate-benefit requesters by accelerating principal and falsely reporting their loans as delinquent to the VA.

Executive summary

The Justice Department announced that Village Capital & Investment LLC, a servicer of home loans guaranteed by the Department of Veterans Affairs, will pay over $500,000 to resolve allegations it violated the Servicemembers Civil Relief Act (SCRA). The department alleges…

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