August 7, 2017

Ditech Financial LLC Sued For Violations of Servicemembers Civil Relief Act of 2003

Block & Leviton is co-counsel in a case challenging Ditech Financial LLC under the Servicemembers Civil Relief Act of 2003, brought on behalf of a class of current and former servicemembers whose statutory rights to a 6% interest rate cap under the SCRA have been violated in connection with mortgage loans incurred by them and their spouses before they were called to active service. The lawsuit challenges Defendant Ditech Financial, LLC’s policy or practice of refusing to apply the SCRA’s 6% interest rate cap for periods of military service, including with respect to those periods preceding the transfer of the servicing rights on those loans to Defendant. Visit our case page for more information.

Summary of the Lawsuit

The lawsuit challenges the policy of Ditech Financial, LLC’s (“Ditech”) formerly known as Green Tree Servicing of refusing to apply the Servicemembers Civil Relief Act’s (“SCRA”) 6% interest rate cap to mortgage loans incurred by servicemembers and their spouses for periods of military service.

Summary of the Claims

This lawsuit alleges Ditech has violated the rights of current and former servicemembers under SCRA by refusing to apply SCRA’s 6% interest rate cap in connection with mortgage loans incurred by servicemembers and their spouses before they were called to active service. The SCRA requires that any liability that has an interest rate higher than 6% per year incurred by a servicemember or jointly with a spouse must be capped at 6% for the period of military service plus one additional year after. Ditech has failed to apply the statutory interest rate cap to mortgage loans for their entire period of military service regardless of whether Ditech was servicing or owned the loans for the entire period, and, as a result, servicemembers and their spouses have paid more interest on their loans than required under the SCRA.

Class Action Allegations

This lawsuit is brought on behalf of the following persons:

All current and former servicemembers:

(1) who entered military service within the meaning of the Servicemembers Civil Relief Act;

(2) who, prior to such period of military service, incurred by themselves or jointly with their spouses an interest-bearing obligation or liability in the nature of a mortgage that is or was serviced by Ditech Financial, LLC or its predecessor;

(3) who, no later than 180 days after such period of military service, provided written notice and a copy of his or her military orders;

(4) where, for any part of such period of military service or the one year thereafter, (a) the interest rate per year on the Mortgage was not reduced to 6% or (b) the interest incurred on the Mortgage at a rate in excess of 6% per year was not forgiven; and

The spouses of such servicemembers who jointly incurred an interest-bearing obligation or liability in the nature of a mortgage that is or was serviced by Ditech Financial, LLC or its predecessor.

Excluded from the Class are all former or current servicemembers who previously reached settlements with or judgments against Defendant resolving or releasing any claims arising during the Class Period under the SCRA related to inadequate interest-rate reductions for periods of military leave.


Status of the Litigation

The Complaint was filed on July 28, 2017. Defendants have not yet responded to the Complaint.

Whom to Contact for More Information

If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:

R. Joseph Barton, Esq. (jbarton@blockesq.com)
Ming Siegel, Paralegal (ming@blockesq.com)
Block & Leviton LLP
1735 20th Street NW
Washington DC 20009
(202) 734-7046

Block & Leviton is co-counsel in this litigation with Crotty & Son Law Firm, PLLC and Law Office of Thomas Jarrard, PLLC.

Block & Leviton LLP
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