Village Capital & Investment LLC has agreed to establish a $425,000 fund to compensate servicemembers over alleged failures to apply military mortgage protections. Its settlement with the Justice Department also requires a separate $79,380 civil penalty paid to the U.S. Treasury.
What DOJ alleged
The agreement resolves allegations under the Servicemembers Civil Relief Act against the Henderson, Nevada, company, which originates, refinances and services Department of Veterans Affairs-guaranteed home loans.
DOJ alleged that Village Capital failed to apply the law's 6% interest-rate protection retroactively and failed to reduce monthly payments by the interest forgiven. It also alleged retaliation through accelerated principal payments and false delinquency reporting after servicemembers requested relief. These are allegations resolved by agreement, not findings after a court proceeding.
The agreement says DOJ reviewed requests made between March 1, 2020, and April 1, 2025, and identified 41 accounts where benefits were incorrectly applied. Further records cover later requests and accounts approved earlier that continued receiving benefits after April 1, 2025.
How compensation is calculated
The company must fund an interest-bearing escrow account within ten calendar days after the agreement's effective date and add money as necessary. The effective date is the last signatory's signature date; these relative deadlines do not establish an absolute payment date here.
For each identified violation, compensation includes accelerated principal payments or interest or fees charged above 6% that the servicemember paid. The calculation starts when military orders were received and ends one year after military service ended or on the agreement's effective date, whichever is earlier. A servicemember also receives $500 or three times that calculated amount, whichever is larger. Prior remediation refunds are deducted under the agreement's formula. The underlying reimbursement is divided equally among all co-borrowers, including non-servicemembers; the additional payment goes only to the servicemember.
What must happen after the settlement
Village Capital must make good-faith efforts to deliver compensation within thirty calendar days of receiving DOJ's final determination. Checks must remain valid for at least six months. Returned payments require prompt efforts to locate recipients and redeliver or reissue them. The same applies to payments not deposited, cashed or returned within six months after sending.
For the agreement's duration, the company must give DOJ six-month accountings after notices are mailed, covering checks issued, checks cashed or deposited, releases and notifications without responses or returned as undeliverable. It also must seek correction of inaccurate credit reporting caused by its application of the benefits.
Those provisions describe required action. The executed agreement itself does not show that the fund has been deposited, a particular check has been delivered or compensation has been received.