National Guardsman Sues Mortgage Servicer for Alleged Interest Overcharges on Repaid Loan

In a recently filed complaint in the U.S. District Court for the District of Connecticut, an active-duty national guardsman alleged that a Connecticut-based mortgage banker, which serviced his mortgage loan, charged him an interest rate of 6.125% in violation of the 6% limit set by the Servicemembers Civil Relief Act (SCRA).

According to the complaint, the guardsman received orders to report for active-duty military service in January 2024 but did not pay off his loan until December 2024.  In January 2025, the complaint continues, the guardsman sent written notice to the mortgage servicer requesting that it reimburse him for interest charged in excess of SCRA’s 6% limit while he was on active duty.  The mortgage servicer allegedly declined this request because “SCRA protections must be applied for while the loan is active.”  The guardsman contends that SCRA’s language stating that interest above 6% “is forgiven” does not limit its scope to reimbursement requested while on active-duty service.

Further, the guardsman seeks to bring a class action on behalf of servicemembers who requested a reimbursement for interest overcharges in violation of SCRA from the mortgage servicer after they paid off their loans.  The mortgage servicer has yet to answer the complaint or file a motion to dismiss.