The lawsuit, filed by Sgt. Benjamin Gleespen in federal court in Connecticut, alleges the company denied his request to retroactively apply the rate mandated by the Servicemembers Civil Relief Act (SCRA) to a mortgage loan he had already paid off.

According to the complaint, filed in mid-May, Gleespen refinanced his home loan in 2022 with CrossCountry Mortgage at an interest rate of 6.125% and paid it off on Dec. 5, 2024. He became an active-duty service member on Jan. 5, 2024 — just under a year before the loan was paid in full.

The SCRA allows servicemembers to request the 6% rate cap for debt incurred even prior to their military service. For a borrower to get rate cap, they must send the creditor a written request and a copy of their military orders, according to justice.gov. 

In January 2025, Gleespen asked Planet Home, which has serviced his loan following its origination, to apply the 6% SCRA rate retroactively to his mortgage during the period of his military service. He also requested a refund for the difference between the interest he paid and what he would have owed under the capped rate. Planet Home denied the request, saying SCRA protections must be applied while the loan is still active, according to court filings.

The complaint argues that the firm's refusal to issue a refund violates the SCRA, which requires lenders to forgive — not defer — any interest charged above 6% for qualifying servicemembers. The lawsuit seeks class-action certification and estimates that hundreds of borrowers may have been affected.

"As a result of Defendant's violations of the SCRA, Plaintiff and the Class are entitled to recover the difference between the amount of interest they were charged in excess of 6% during the period of their military service and the amount they would have been charged had Defendant applied a rate of 6% during that period," the complaint states.

In a separate filing dated July 16, Planet Home said it did not violate the SCRA because the loan had already been paid off by the time Gleespen requested the interest rate adjustment.

"Plaintiff's loan with Planet Home was already paid off at the time he requested the interest rate limitation, demonstrating that the difference between his 6.125% interest rate and the statutory limit of 6% did not materially affect his ability to pay on the loan," the company said in court documents. "As a result, Plaintiff's claims against Planet Home fail and should be dismissed."

"Planet is aware of the lawsuit and confident we complied with all applicable law," the company added in a statement Monday. "We will address the matter through the legal process."