A house owner says Planet Home Lending violated a federal legislation that caps rates of interest at 6% for active-duty servicemembers.
The lawsuit, filed by Sgt. Benjamin Gleespen in federal court docket in Connecticut, alleges the corporate denied his request to retroactively apply the rate mandated by the Servicemembers Civil Relief Act (SCRA) to a mortgage mortgage he had already paid off.
According to the grievance, filed in mid-May, Gleespen refinanced his residence mortgage in 2022 with CrossCountry Mortgage at an curiosity rate of 6.125% and paid it off on Dec. 5, 2024. He turned an active-duty service member on Jan. 5, 2024 — slightly below a 12 months earlier than the mortgage was paid in full.
The SCRA permits servicemembers to request the 6% rate cap for debt incurred even previous to their navy service. For a borrower to get rate cap, they need to ship the creditor a written request and a duplicate of their navy orders, based on justice.gov.
In January 2025, Gleespen requested Planet Home, which has serviced his mortgage following its origination, to use the 6% SCRA rate retroactively to his mortgage in the course of the interval of his navy service. He additionally requested a refund for the distinction between the curiosity he paid and what he would have owed underneath the capped rate. Planet Home denied the request, saying SCRA protections have to be utilized whereas the mortgage continues to be lively, based on court docket filings.
The grievance argues that the agency’s refusal to challenge a refund violates the SCRA, which requires lenders to forgive — not defer — any curiosity charged above 6% for qualifying servicemembers. The lawsuit seeks class-action certification and estimates that a whole bunch of debtors could have been affected.
“As a outcome of Defendant’s violations of the SCRA, Plaintiff and the Class are entitled to recuperate the distinction between the quantity of curiosity they had been charged in extra of 6% in the course of the interval of their navy service and the quantity they might have been charged had Defendant utilized a rate of 6% throughout that interval,” the grievance states.
In a separate submitting dated July 16, Planet Home stated it didn’t violate the SCRA as a result of the mortgage had already been paid off by the point Gleespen requested the curiosity rate adjustment.
“Plaintiff’s mortgage with Planet Home was already paid off on the time he requested the curiosity rate limitation, demonstrating that the distinction between his 6.125% curiosity rate and the statutory restrict of 6% didn’t materially have an effect on his capacity to pay on the mortgage,” the corporate stated in court docket paperwork. “As a outcome, Plaintiff’s claims towards Planet Home fail and must be dismissed.”
“Planet is conscious of the lawsuit and assured we complied with all relevant legislation,” the corporate added in an announcement Monday. “We will handle the matter by the authorized course of.”
