The judge presiding over Ditech Holding Corp.’s bankruptcy rejected a proposed restructuring of one of the nation’s largest mortgage origination and servicing businesses, ruling the terms weren’t fair to borrowers, WSJ Pro Bankruptcy reported. In a 134-page ruling filed yesterday, Judge James L. Garrity Jr. of the U.S. Bankruptcy Court in New York said the plan could prevent homeowners whose mortgages were serviced by Ditech from fighting back against fees, defaults and foreclosures once the company’s assets are sold. Ditech hasn’t shown the plan is fair to consumers who have claims against the Fort Washington, Pa.-based company, according to the judge’s ruling. Those consumers took out mortgages or reverse mortgage that were originated, serviced, sold, consolidated or owned by Ditech or any of its bankrupt affiliates, which also include Green Tree Servicing Corp. and Reverse Mortgage Solutions Inc. The restructuring proposal revolved around the $1.8 billion sale of its mortgage servicing businesses.
