UPDATED: MAY 26, 5:42 P.M.

WASHINGTON — About 180 U.S. servicemembers whose homes were foreclosed on between 2006 and 2009 will be paid an average of $125,000 each under a pair of settlements announced by the Department of Justice on Thursday.

BAC Home Loans Servicing LP, formerly known as Countrywide Home Loans Servicing LP and now a subsidiary of Bank of America, will pay a minimum of $20 million for allegedly foreclosing illegally on 160 members of the military. Separately, Saxon Mortgage Services Inc., part of Morgan Stanley, will pay at least $2.35 million for improperly foreclosing on 17 servicemembers.

The lenders failed for years to check whether servicemembers whose homes they planned to foreclose on were covered by the Servicemembers Civil Relief Act, the Justice Department alleged. Under the law, people who join the military, are called up from the reserves, or deploy overseas are supposed to be protected from home foreclosures without a court order.

Thomas E. Perez, assistant attorney general for the Justice Department’s civil rights division, said the department has investigated the foreclosures for two years, and that other lenders are being examined for similar wrongdoing.

“This is easily the largest amount ever recovered by the Department of Justice in an SCRA case,” Perez said.

Both Bank of America and Saxon also agreed to make payments to any other military members who come forward and can show they were improperly foreclosed on before the end of December 2010. Anyone who believes they were affected should call the Justice Department, at 1-800-896-7743, mailbox 6 for Countrywide, or 1-800-896-7743, mailbox 995 for Saxon.

The government filed both the complaints and settlement documents at the same time Thursday in U.S. District Courts in Texas and California. According to the allegations, Bank of America and Saxon had no process in place to determine whether the homeowners whose mortgages they were pursuing were in the military.

In several cases, that the Justice Department cited, both lenders refused to delay foreclosures even after receiving notification and copies of military orders from the homeowners showing that they were on active duty.

In one instance, a homeowner had been severely injured by an improvised explosive device in Iraq. He suffered a broken back and traumatic brain injury, and came home to find his home foreclosed on while he was still on active duty, receiving treatment and learning to walk again. In another case, a veteran diagnosed with post-traumatic stress disorder after an Iraq deployment in 2003 and 2004 sent multiple notices to the lender showing that he was in the military. His home was foreclosed on anyway.

In addition to the cash settlements, the lenders agreed not to pursue the remainder of the mortgage balances owed on each loan. They also committed to take steps to repair the borrowers’ credit reports, and to implement new training and policies to ensure that they don’t foreclose on more servicemembers’ properties.

Twitter: @BillMurphyJr

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