Not long after the U.S. Trustee granted its petition to create a committee to protect consumer interests in its bankruptcy proceedings, Ditech filed a motion objecting to such a committee, asking that it be disbanded or, alternatively, that the scope of its involvement be limited, HousingWire.com reported. The consumer committee drama began last month when several advocacy groups filed petitions with the U.S. Trustee asking for the creation of a committee to represent the interests of the mortgage borrowers who have loans with Ditech or its subsidiaries. Among those seeking representation were Chicago-area victims of a reverse mortgage scam whose loans were being serviced by Ditech subsidiary Reverse Mortgage Solutions. The representative of some of those victims, J. Samuel Tenenbaum of Northwestern’s Complex Civil Litigation and Investor Protection Center, said such a committee was necessary to protect the rights of these borrowers, who are mostly elderly, disabled or financially unstable, and therefore vulnerable. In response, the Trustee approved of the creation of a five-member consumer committee on May 2, but the ink was barely dry before Ditech filed its objection, claiming that the Trustee’s move was “arbitrary and capricious” and would have a chilling effect on Ditech’s attempts to sell off portions of its business. If the court will not disband the committee, Ditech asked that the committee’s scope be limited and its fees and expenses capped at $250,000.
