The U.S. Justice Department has sued the largest foreclosure trustee in the Pacific Northwest, claiming it illegally foreclosed on at least 28 military members or veterans in the past six years.

The lawsuit filed Thursday in U.S. District Court in Seattle was prompted by the case of Jacob McGreevey, a longtime Marine who lost his Vancouver home to foreclosure between his third and fourth tours of duty in the Middle East.

The federal lawsuit comes six months after The Oregonian/OregonLive chronicled McGreevey's legal fight against his former lender. At the time, the Justice Department sided with the bank.

Now, in a marked reversal, the U.S. Department of Justice has accused Bellevue, Washington-based Northwest Trustee Services of repeatedly ignoring the Servicemembers Civil Relief Act, an obscure and often overlooked federal law intended to protect members of the military from foreclosure and other collections efforts while they're on active duty.

With Northwest Trustee's help, PHH Mortgage of New Jersey repossessed McGreevey's house in 2010.

The Department of Justice alleges that Northwest Trustee checked a federal database to see whether McGreevey was protected due to his service. It proceeded with the foreclosure anyway.

No charges have been filed against PHH.

"The loss of a home is a devastating blow for anyone – but far worse for active duty service members often called to war zones," said Annette Hayes, U.S. Attorney in the Western District of Washington.

"Our investigation revealed that Northwest Trustee Services repeatedly failed to comply with laws that are meant to ensure our servicemembers do not have to fight a two-front war – one on behalf of all of us, and the other against illegal foreclosures."

Sean Riddell, McGreevey's Portland lawyer and a Marine who served for a time as McGreevey's commanding officer in Iraq and still serves in the reserves, offered a less diplomatic view. "I want Northwest Trustee and PHH put out of business, their buildings burned down and the ground salted so that nothing ever grows for what they did to veterans," he said.

Northwest Trustee did not return phone calls and emails seeking comment. It emerged as the region's dominant foreclosure mill law firm during the Great Recession of 2008-2010. In a 2012 interview, CEO Stephen Routh said Northwest Trustee was handling 48,000 foreclosures a year.

The Justice Department did not release the names on the foreclosure list, other than McGreevey's. But it's likely to include other potential victims from the region. Oregon is part of Northwest Trustee's territory.

McGreevey and Riddell have fought a so-far unsuccessful legal fight against PHH and Northwest Trustee. A district court judge threw out McGreevey's lawsuit last December, agreeing with the defendants that he'd waited too long to file the action.

McGreevey appealed and the case is currently pending before the 9th U.S. Circuit Court of Appeals.

McGreevey was in Fallujah in Iraq's "bloody triangle" during the surge. Altogether, he served four tours in either Iraq or Afghanistan. In between deployments, McGreevey would return to Vancouver, where he bought a house on Northeast 24th Court. But he fell behind on payments.

PHH Mortgage repossessed his house in June 2010. Knowing next to nothing about the consumer protections afforded him as a member of the military, McGreevey didn't contest it. The foreclosure became final the following September.

McGreevey had advanced from private to staff sergeant by the time his final deployment ended in 2012. Though diagnosed 80 percent disabled with post-traumatic stress syndrome, hearing loss and a back injury, he set about reinventing himself for civilian life. He earned a business degree from Portland State University and got a job at a bank.

That's when he learned about consumer protection laws, including the Servicemembers Civil Relief Act. He got on the phone and asked Riddell for help.

The Department of Justice is seeking monetary damages from Northwest Trustee. If it wins, the proceeds could be shared with McGreevey and the 27 others, federal officials said.

In other recent cases involving similar violations against veterans, the Justice Department secured settlements that returned about $125,000 per victim.

The Servicemembers Civil Relief Act protects military members by suspending or modifying certain civil obligations. The law prohibits foreclosures while they are on active duty and one year thereafter without a court order.

The Justice Department launched its investigation after McGreevey and Riddell submitted a written complaint in May 2016.

As currently written, the Servicemembers Civil Relief Act does not have a statute of limitations. That forces judges to look to the closest analogous state law to determine which time limit should apply. The judge in McGreevey's case ruled that the deadline in Washington state is four years after the collection action, which meant that McGreevey filed his case too late.

Last May, U.S. Rep. Kurt Schrader, D-Oregon, introduced legislation that would have lengthened the statute of limitations for veterans to file Servicemembers Civil Relief Act cases.

The legislation went nowhere in the Republican-controlled House.

-- Jeff Manning

503-294-7606, jmanning@oregonian.com