This week, CitiMortgage requested a case against them be dismissed, as an active duty member of the military has sued them, alleging SCRA violations. This case could ultimately change the wording of the SCRA regarding protected interest rates.

, AGBeat

Federal lawsuit against CitiMortgage

South Carolina Army sergeant, Raymond Wray filed a federal lawsuit accusing CitiMortgage of violating the 70+ year old Servicemembers Civil Relief Act (SCRA) which limits interest rates to 6.0 percent for military on active duty. Filed in the U.S. District of South Carolina, court documents reveal that the home Wray bought in 1997 for $68,000 was initially at a 12.99 percent interest rate.

When Wray enlisted in the Army two years later, he requested CitiMortgage, who had purchased his loan, to reduce his rate due to his becoming an active duty member of the military. The SCRA covers mortgages that were acquired prior to a servicemember’s enlisting in the military.

Wray, who continues to be on active duty, alleges the SCRA was violated when the bank refused the request, rather used a subsidy program under which the company agreed to make up the difference between his 12.99 rate and the 6.0 percent rate, meaning he was paying less principal toward his home and gaining less equity in it.

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