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Ditech Deal With Homeowners Paves Way for $1.8 Billion Sale

  • Agreement preserves right to fix alleged mistakes on mortages
  • Judge had rejected sales that were “free and clear” of claims
Long Island Home Flippers Sell To Each Other In Red-Hot Market
Photographer: Johnny Milano/Bloomberg
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Bankrupt mortgage servicer Ditech Holding Corp. cleared the way for the $1.8 billion sales of its businesses by agreeing on Tuesday to preserve some homeowner claims like the right to fix mistakes on their loans.

The accord ends a dispute over the sales, allowing Ditech to pay creditors and exit bankruptcy. A group of consumer creditors as well as attorneys general from about a dozen states objected to a previous plan to offload the assets in “free and clear” transactions. Those arrangements would have stripped homeowners of rights, including those that could help them save their homes from wrongful foreclosures, the New York attorney general’s office wrote in its objection to the sales.