(Updates with excerpt from complaint in fourth paragraph.)
July 8 (Bloomberg) -- A Citigroup Inc. unit was sued by an Iraq War veteran who claims the lender illegally foreclosed on his home while he was on active military duty.
Jorge Rodriguez, a U.S. Army sergeant, claimed in a complaint filed today in federal court in Manhattan that he was in training in preparation for deployment to Iraq in 2006 when CitiMortgage filed a foreclosure suit against his home in Del Valle, Texas.
CitiMortgage lawyers falsely said in an affidavit that Rodriguez wasn’t on active service at the time, depriving him of protection under the Servicemembers Civil Relief Act, or SCRA, according to the complaint. Rodriguez is seeking to have the suit certified as a class action against CitiMortgage on behalf of other service members whose homes were foreclosed.
“This was not an isolated incident,” Rodriguez said in the complaint. Beginning in December 2003, “CitiMortgage initiated thousands of foreclosure proceedings across the United States without adequate safeguards to ensure that service members on active duty were not targeted by CitiMortgage’s foreclosures.”
The suit seeks unspecified damages and an order restoring to service members possession of properties foreclosed in violation of the SCRA.
Sean Kevelighan, a Citigroup spokesman, said the bank is looking into the matter.
SCRA protections for active-duty members of the military include a 6 percent cap on pre-service loans, limits on court proceedings and a ban on foreclosures without court approval.
Bank of America Corp. and Morgan Stanley agreed in May to pay $22.4 million to resolve U.S. allegations that they improperly foreclosed on active-duty soldiers. JPMorgan Chase & Co. earlier agreed to a $56 million settlement of claims that it illegally overcharged military personnel on home loans.
The case is Rodriguez v. CitiMortgage Inc., 11-cv-04718, U.S. District Court, Southern District of New York (Manhattan).
--Editor: Mary Romano, Michael Hytha
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