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, Bloomberg News reported. 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. Late last month the federal judge overseeing the case sided with consumers and state authorities and rejected the sales. The bankruptcy court still needs to approve the new deal as part of Ditech’s bankruptcy plan. A hearing is slated for Sept. 25. After negotiations this month, Ditech and the consumer creditor group reached an agreement that creates a $10 million fund for claims holders and requires the appointment of a special master to hear consumer claims, Ditech lawyer Ray Schrock said in court. The sale doesn’t ratify mistakes in mortgage accounts and both Ditech and the new buyers have committed to investigate account misstatements and correct them.
