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CitiMortgage sued by soldier over mortgage interest rate

This week, CitiMortgage requested a case against them be dismissed, as an active duty member of the military has sued them, alleging SCRA violations. This case could ultimately change the wording of the SCRA regarding protected interest rates.

military salute

military salute

Federal lawsuit against CitiMortgage

South Carolina Army sergeant, Raymond Wray filed a federal lawsuit accusing CitiMortgage of violating the 70+ year old Servicemembers Civil Relief Act (SCRA) which limits interest rates to 6.0 percent for military on active duty. Filed in the U.S. District of South Carolina, court documents reveal that the home Wray bought in 1997 for $68,000 was initially at a 12.99 percent interest rate.

When Wray enlisted in the Army two years later, he requested CitiMortgage, who had purchased his loan, to reduce his rate due to his becoming an active duty member of the military. The SCRA covers mortgages that were acquired prior to a servicemember’s enlisting in the military.

Wray, who continues to be on active duty, alleges the SCRA was violated when the bank refused the request, rather used a subsidy program under which the company agreed to make up the difference between his 12.99 rate and the 6.0 percent rate, meaning he was paying less principal toward his home and gaining less equity in it.

CitiMortgage filed for dismissal this week

CitiMortgage has just filed for a dismissal, as Judge Cameron McGowan Currie has set jury selection will begin this year. CitiMortgage claims that paying less principal is not recognized under the SCRA, and that his effective interest rate was capped at 6.0 percent, per the Act.

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Wray says he will be seeking class-action status on behalf of any other soldiers who have had the same experience with CitiMortgage. He is seeking unspecified damages and also wants CitiMortgage to be ordered to pay his legal fees.

The SCRA is very basic financial protections put in place for active military members so they don’t have to be burdened by any additional financial pressures that are difficult to control from abroad; it’s an exchange our nation offers for their risking their lives to protect us. SCRA violations are very serious, and should CitiMortgage be found guilty, the Act could potentially be updated to include more detailed rules on how the 6.0 percent cap works.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.



  1. Charles Reed

    February 23, 2013 at 12:33 pm

    As a prime/government loan officer at a bank and who sold loan to Citi Bank and the other large bank is why were these Troops even these loans in the first place instead of a VA loan? Let simply pull up the loan file and recreate why the patriot was given a 12.99% loan.

    Now I know why this was done in part because the loan was only $68,000, plus let see what they charged in point on top of this. If Obama wants to really see Justice done for the Troops, he would have called on me by now, but he does not want to know the truth.

    Many young Troops heading into harms way to fight the senseless battles, were preyed upon while having little or none knowledge of financing as they enter as teenagers and shipped off here and there, and while only having the advice of financial experts they paid to give the best advice.

    This Nation will find out other crime done to Our Troops at the hand of the Federal Government in Ginnie Mae with these banks as co-conspirators. Truth is taking all the foreclosed VA loans that were in the Ginnie Mae pools and showing the Notes that are to this day still endorsed in blank. Let stop all the theater and let deal with Contract Law. Man up

    • Greg Fischer

      February 24, 2013 at 12:37 am

      Charles – he got the loan before he joined, he wasn’t eligible for a VA loan

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