Lawsuit: Ditech Financial Charges Servicemembers Illegal Interest Rates During Military Service

New to ClassAction.org? Read our Newswire Disclaimer

Ditech Financial, LLC is facing a proposed class action filed in Washington by a retired Army National Guard major who claims the loan serving company charged him and other servicemembers an improper amount of interest on their mortgages. The allegations are centered around the Servicemembers Civil Relief Act of 2003 (SCRA), which protects servicemembers from being charged interest in excess of 6 percent on “any obligation or liability” during the entire period of their military service and one year after.

The plaintiff – who served in the National Guard from October 29, 2005 until his retirement on August 31, 2015 – claims he provided Ditech with proper written notice of his service and copies of his military orders but that the defendant failed to adjust his interest rate to 6 percent or lower. After multiple attempts to request SCRA protections, the plaintiff received a letter from Ditech dated November 6, 2015 informing him that it would apply a 6 percent interest rate to his mortgage retroactive to October 1, 2013 and in effect until one year after the date of his retirement from active duty, the case says. The plaintiff claims, however, that the defendant improperly refused to forgive his excessive interest for the period between October 29, 2005 and September 30, 2013, which Ditech says preceded the date it began servicing his loan.

“As a result of [the defendant’s] policy and practice,” the complaint argues, “servicemembers and their spouses in the [proposed class] either paid more interest on their loans or Ditech is seeking to require them to pay more interest than allowed under the SCRA.” The plaintiff says the principal of his mortgage “has been and continues to be inflated” and that his monthly interest is “excessive and improper” under federal law.