A handful of homeowners who may be affected by mortgage servicer Ditech Holding Corp.’s bankruptcy have been named to a Justice Department-appointed committee, giving them a platform to amplify their concerns, WSJ Pro Bankruptcy reported. The Justice Department division that monitors corporate bankruptcy cases told Judge James L. Garrity Jr. in court papers filed on Thursday that it has created a committee for Ditech customers who have raised questions about how the company’s chapter 11 case will affect them. The Fort Washington, Pa., company, which collects mortgage-loan payments on about 1.4 million residential loans through Ditech Financial LLC, Green Tree Servicing Corp. and other associated companies, filed for bankruptcy on Feb. 11. It blamed its financial troubles on rising interest rates and its own heavy debt payments. The company faces thousands of litigation claims from homeowners who have notified the company of mistakes related to their mortgage accounts, according to documents filed in U.S. Bankruptcy Court in New York.
