Earlier this week, the federal watchdog tasked with protecting consumers from misleading and predatory lending tactics issued more guidance designed to help military servicemembers avoid excess charges when changing stations.

The federal Consumer Financial Protection Bureau, in association with a number of other regulators, recently issued some additional guidance to mortgage servicing companies with regard to the way they handle the accounts of military members who receive permanent change of station orders, the agency announced. About one in every three servicemembers on active duty receive these PCS orders every year.

The problem these orders pose to military members is that they are not negotiable and typically come at relatively short notice, which can leave them scrambling to sell their homes or at least find a renter, the report said. Further, the servicemember might find that their new station has a smaller housing allowance, meaning that they might be falling even farther short when it comes to meeting the obligations associated with their old property. As a consequence of these concerns, military members and their families need the most comprehensive data available to them about how best to approach their housing concerns, including whether they qualify for loan modifications or short sales. Further, they need it explained as clearly and concisely as possible given the other stresses in their lives that PCS orders can cause.

"Those who serve our country deserve to be given the best service by their mortgage servicer," said CFPB director Richard Cordray. "Permanent Change of Station orders can complicate a servicemember's homeownership decisions in ways that civilians may not experience. This guidance provides specific notice to mortgage servicers that this country already has substantial laws in place to help military members in this still-recovering housing market."

Protections increasing considerably
Now, mortgage servicers will have to provide literature which clearly and accurately explains the military member's potentially available assistance options based on the information the servicer has, the report said. Further, the company cannot ask them to waive their rights under the Servicemember Civil Relief Act or any other such law as a condition of receiving this information, which occasionally took place in the past.

Some mortgage servicers were even advising military members who were current on their home loan payments to stop making them so as to potentially qualify for modification programs for which they otherwise might not have been eligible, the report said. The new rules also call for mortgage servicers to provide a "reasonable means" for military members to find out information about their requests for assistance, and to expediently communicate any decisions related to it.

However, all consumers should take the time to be more protective of their own finances, and can do so by checking their credit reports regularly. By doing so, they may be able to identify any potentially unfair markings that can have adverse effects on their credit ratings.