New York Attorney General Letitia James has filed a brief in the U.S. Bankruptcy Court for the Southern District of New York seeking to prevent the bankruptcy filing by Ditech Holding Corp.
According to a statement issued by James’ office, Ditech has more than 880 active foreclosure actions pending across New York State. Homeowners impacted by these actions have organized the Consumer Creditors Committee to prevent their claims and defenses against the servicer are not erased in Bankruptcy Court. James’ office also has currently an open investigation into Reverse Mortgage Solutions (RMS), a reverse mortgage servicer that is owned by Ditech.
“Bankruptcy Court should never be used as a tool to unjustly oust New Yorkers from their homes,” said James. “Ditech’s action is an illegal attempt to strip hundreds of homeowners of their legitimate claims and eviscerate New York’s carefully-created foreclosure process. Housing is a right, and we will continue to use every legal tool at our disposal to stand up for homeowners and to protect their rights.”