1. What is the purpose of this settlement?
This
settlement was entered on December 16, 2002, and
was a result of investigations by New Jersey and
other States and the District of Columbia into
allegations of unfair and deceptive mortgage lending
practices by Household and Beneficial. This Settlement
will provide partial relief to borrowers in connection
with real estate secured loans obtained from Household
or Beneficial.
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2. What makes a consumer eligible to participate?
You
must have obtained a real estate secured loan
(i.e. a mortgage loan or home equity loan) from
a Household or Beneficial retail-lending branch
between January 1, 1999 and September 30, 2002.
This includes loans that were opened during this
time period regardless of whether or not the loan
is currently open or closed.
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3.
Who determines eligibility to participate?
Each
State has set eligibility standards for its own
consumers. In New Jersey, the Attorney General
and the Commissioner of Banking and Insurance
established the criteria for eligibility. Any
borrower who receives a Release form will have
been deemed eligible to participate under New
Jersey's settlement formula. (See
Question 24 below)
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4.
What is the total settlement fund?
The
total settlement fund is $484,000,000. It has
been divided among the 50 states and the District
of Columbia based upon the total dollar amount
of the real estate secured loans made in each
State. New Jersey received $17,725,210 as its
share of this restitution fund to be distributed
to eligible borrowers.
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5. What are the loan dates that qualify a consumer
to be eligible to participate?
The
loan must have been taken out between January
1, 1999 through September 30, 2002, and be a real
estate secured loan.
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6. What is the deadline for returning my Release
form?
The
deadline for returning a signed Release form is
October 14, 2003. Forms mailed after this date
may not be accepted.
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7. What do I give up by participating in this
settlement?
By
signing the Release form, you give up your right
to sue or join any class action against Household
or Beneficial in connection with your real estate
secured loan originated by Household's retail-lending
branches from January 1, 1999 through September
30, 2002. However, you may still assert any claim
or defense you have with respect to these loans
in response to a judicial or threatened non-judicial
foreclosure.
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8. What if I don't want to participate in this
settlement?
Simply
do not complete the Release form. Nothing else
is required. By completing a Release form, you
are agreeing to participate in the Settlement.
If you do not return a signed Release form, you
have not agreed to participate and will automatically
be excluded from the Settlement and will not receive
a Settlement payment.
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9. How do I obtain more information on this settlement?
You
may go to the Settlement Administrator's website
at www.household-beneficial-settlement.com. to
obtain general information about the settlement.
New Jersey's website is www.nj.gov/lps/householdsettlement.
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10. What do I need to do to participate in the
settlement?
Borrowers
who are eligible to participate will receive a
letter and Release form from Attorney General
Peter C. Harvey and Holly C. Bakke, the Commissioner
of the Department of Banking and Insurance. As
explained in the letter, borrowers need only fill
out, sign and return the Release form in the postage
pre-paid envelope provided by October 14, 2003,
in order to participate. Borrowers should retain
the "borrower copy" of the Release for
their own records. The letter describes what to
do if there is more than one borrower listed on
a given loan.
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11. Why did I receive more than one Release Packet?
Borrowers
who have more than one real estate secured loan
with Household or Beneficial, but obtained one
loan individually and the other(s) with a co-borrower,
or had different co-borrowers on the loans (for
example, a spouse was the co-borrower on one loan
and a brother or sister was the co-borrower on
a second loan), will receive separate Release
Packets for each loan. These borrowers must sign
and return each Release form included in each
separate Release Packet in order to receive a
payment on all covered loans. If there is a problem
with getting a co-borrower's signature, please
follow the procedure set forth in Question 28
below. Please make sure you keep the copy of each
Release form for your records.
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12. I lost my Release form. Can you mail me another
release form?
You
may contact the Settlement Administrator toll-free
at 1-888-780-2156 or the Settlement Administrator's
website, www.household-beneficial-settlement.com
, to request another Release packet. Once you
reach the website, there is an option to contact
the Administrator via email. You can request another
Release packet by emailing the Settlement Administrator.
After receiving your email, the Settlement Administrator
will confirm that you are eligible to participate
in the Settlement and then will send you another
Release packet as soon as possible.
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13. What is the deadline to file a claim?
The
deadline to file a Release form in this settlement
is October 14, 2003.
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14. How will I know if my Release form has been
received?
You
may contact the Settlement Administrator at
888-780-2156 or the Settlement Administrator's
website, www.household-beneficial-settlement.com
to check on the status of your Release form. Once
you reach the website, there is an option to contact
the Administrator via email. The Settlement Administrator
will receive your email and respond as quickly
as possible (by email or phone). Please wait one
week from the time you return your Release form
before contacting the Settlement Administrator
to see if your Release form has been received.
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15. Will my information be kept confidential?
Yes,
the Settlement Administrator will protect the
privacy of all information provided to us by you
or Household or Beneficial. This information will
be used only to administer this Settlement.
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16. What if my loan is not a real estate loan?
Can I still be included in this Settlement?
The
Settlement only covers real estate secured loans
(i.e. mortgage loans or home equity loans) from
a Household or Beneficial retail-lending branch
that were entered into between January 1, 1999
and September 30, 2002. This includes loans that
were opened during this time period regardless
of whether or not the loan is currently open or
closed.
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17. I have a real estate loan that I opened on
(any date prior to or after the date covered by
the Settlement agreement). Am I included in this
Settlement?
No,
the Settlement only covers real estate secured
loans (i.e. mortgage loans or home equity loans)
from a Household or Beneficial retail-lending
branch that were entered into between January
1, 1999 and September 30, 2002. This includes
loans that were opened during this time period
regardless of whether or not the loan is currently
open or closed.
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18. Can I take the signed Release form to my Household
(or Beneficial) Branch Office or State Official's
Office?
No,
the signed Release form must be returned to the
Settlement Administrator at:
Household-Beneficial
Settlement Administrator
PO Box 3775
Portland, Oregon 97208-3775
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19.
Can I fax my Release form to my Household (or
Beneficial) Branch Office or State Official's
Office?
No,
the Settlement Administrator must receive an original
signature; therefore, you have to return the form
by mail. The original and signed Release form
must be returned to the Settlement Administrator
at:
Household-Beneficial Settlement Administrator
PO Box 3775
Portland, Oregon 97208-3775
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20.
I have already paid off my Household (or Beneficial)
real estate secured loan. Am I still included
in this Settlement?
Yes,
customers whose loans have already been paid off
are eligible to participate in the Settlement
provided that the loans were real estate secured
loans (i.e. mortgage loans or home equity loans)
from a Household or Beneficial retail-lending
branch that were entered into between January
1, 1999 and September 30, 2002. This includes
loans that were opened during this time period
regardless of whether or not the loan is currently
open or closed.
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21. My real estate secured loan is open and I'm
still making payments to Household (or Beneficial).
Am I still included in this Settlement?
Yes,
customers whose loans are still open may be eligible
to participate in the Settlement provided that
the loans were real estate secured loans (i.e.
mortgage loans or home equity loans) from a Household
or Beneficial retail-lending branch that were
entered into between January 1, 1999 and September
30, 2002. This includes loans that were opened
during this time period regardless of whether
or not the loan is currently open or closed.
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22. If I sign this Release form, does this mean
that I don't have to continue to make payments
on my loan?
No,
this Settlement does not affect the status of
your loan or release you from any payment obligation
for any open loan with Household or Beneficial.
You must continue to make your loan payments in
accordance with the terms of the loan agreement.
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23. How much money will I receive if I participate
in the Settlement?
Under
the settlement agreement with Household, each
State is able to decide individually how to disburse
its available restitution funds. New Jersey's
restitution plan is described below in Questions
24 and 25. The minimum restitution amount you
are eligible for is on the Release form you received
with the notice letter. You may get more than
this amount, depending on the number of borrowers
in New Jersey who decide to particpate in the
Settlement, but you will not get less than this
minimum amount.
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24. What is New Jersey's restitution plan?
New
Jersey will utilize a combined matrix that takes
into account certain harms where actual dollar
values could be calculated (loan points, prepayment
penalties and insurance products) and uses a matrix
for certain harms that did not lend themselves
to such precise calculations (loan to value ratio,
("LTV"), split loans and EZ Pay). Each
eligible borrower will receive a minimum recovery
of $150 (which equals $2,910,000 of the $17,725,210
restitution fund) to which the additional harm
categories will be added.
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25. How was the minimum amount on my Release form
calculated?
Each
participating eligible consumer in New Jersey
will receive a minimum of $150. To this amount
will be added additional sums based upon a combined
matrix. Using the formula decided upon by New
Jersey, 60% of your payment is based upon a fraction
with the numerator being the net amount of dollars
you paid for loan points, prepayment penalties
and insurance products and the denominator being
the sum total of these same items for all New
Jersey Covered Loans multiplied by $8,889,126
($17,725,210 restitution fund minus the $2,910,000
deduction for the $150 minimum recovery multiplied
by 60%).
The
remaining 40% of your payment is based upon a
matrix set up for these factors: the loan to value
ratio ("LTV") of your loan, whether
you had split loans and/or whether you participated
in Household's EZ Pay program. New Jersey has
determined that these harms, which are not easily
quantifiable by a dollar value, should nevertheless
be compensated under the restitution plan. These
harms will be paid out according to a matrix scored
for the harm found in each loan multiplied by
a weight factor. If present in the loan, EZ Pay
and piggyback loans are scored at one (1) point
and multiplied by the weight factor of 3 (EZ Pay)
and 10 (split loans) respectively. LTV point ranges
are based on the LTV ratio with 1 point awarded
for an LTV of 101 to 110%; 2 points for an LTV
of 111 to 120%; 3 points for an LTV of 121 to
129% and 4 points for an LTV of 130% and above.
Each LTV range is multiplied by the weight factor
of 5. LTV point ranges are based on the highest
ratio in any consumer's covered loans. The value
of each point will be the same for all New Jersey
borrowers and is determined by dividing 40% of
the remaining restitution fund ($5,926,084) by
the total number of points for all New Jersey
Covered Loans.
Any
amounts that you are eligible to receive under
the above calculations are then added to the minimum
$150.00.
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26. What determines whether I get more than the
minimum amount shown on my Release?
The
exact amount you will receive depends on how many
eligible New Jersey choose to participate in the
settlement. Under no circumstances will you receive
any less than the minimum amount shown on the
Release form you receive, but you could receive
more.
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27. If my loan had a co-borrower, do we both need
to sign the release form?
Yes, all borrowers who signed the original loan
documents must sign the Release form in order
to receive payment. If there is more than one
borrower on the loan, the Release form will not
be valid with only one signature. If there is
more than one borrower, payment cannot be made
to one or another of the co-borrowers, but must
be made to both (assuming both borrowers can sign
the form--see question 28 below).
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28. I had a co-borrower but cannot get a signature
(due to divorce, estrangement, etc). What are
my options?
If
you've made every effort to obtain the co-borrower's
signature, but cannot get it, you should sign
and send in the Release form with a letter attached
explaining the circumstances as to why the co-borrower
signature cannot be completed. The States and
Household or Beneficial will review your submission,
and you will be notified of their decision. If
your submission is accepted, payment will be made
to you alone (without the other borrower's name
appearing on the check).
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29. I am the guardian or executor to the estate
of (claimant name) and he/she was sent
a Release form for this settlement. How can the
form be completed?
Sign
and date a letter explaining the circumstances
and attach your letter to the Release form along
with photocopies (please do not send in original
legal documents) of any other legal documentation
showing you as the guardian or executor of the
estate of (claimant name). Return the letter,
copies of documents and Release form to the Settlement
Administrator, along with the address where payment
should be sent, before October 14, 2003. The States
and Household or Beneficial will review your submission,
and you will be notified of their decision. If
your submission is accepted, payment will be made
payable to "The Estate of (claimant name)."
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30. I have moved. What if I don't receive my letter
from the Administrator?
You
can go ahead and send in a letter stating your
new address to the following address:
Household-Beneficial
Settlement Administrator
PO Box 3775
Portland, Oregon 97208-3775
Please
provide your full name, former address and any
other kind of identifying information such as
a loan account number, social security number,
etc. The Administrator will then update your address
in the system for future mailings. If you don't
receive the letter and Release form by the end
of August, please contact the Administrator so
that it again can re-send another form if you
are eligible to participate in the settlement
program.
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31. When will I receive my payment?
Remember,
if you want to receive payment, you must mail
your signed Release form by October 14, 2003.
Because this Settlement involves hundreds of thousands
of borrowers across the country, it will take
some time for the Settlement Administrator to
process all Release forms. If everything goes
as planned, we anticipate that payments will be
mailed by the Settlement Administrator by the
end of December 2003.
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32. Do I have to pay taxes on the settlement payment
I will be receiving?
Some
consumers may receive a 1099 form with their settlement
payment. However, whether any payment that you
receive under this settlement is taxable will
depend on several factors. Because of this, we
are not able to give any individual tax advice.
If you have tax questions, you should contact
a local tax preparer or advisor.
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33. What if my home is in foreclosure or has gone
through foreclosure?
If
you receive a Release form, you are eligible to
receive a payment under the Settlement. However,
participating in the Settlement and receiving
a payment will NOT stop or undo a foreclosure.
If you choose to participate in the Settlement,
you must sign and return the Release form. In
doing so, you give up various legal rights (listed
on the Release form), but you do not give up your
right to raise any rights and defenses in a foreclosure
action. You are advised to contact a private attorney
about your situation.
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34. I want to pay off my Household (or Beneficial)
loan. How can I find out what my payoff balance
is?
To
obtain a payoff statement from Household (or Beneficial),
you may contact Household's Customer Service Department
at 888-395-6000 or www.householdfinance.com
or Beneficial's Customer Service Department at
800-957-0003 or www.beneficial.com.
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35. I have other questions regarding my Household
(or Beneficial) loan. Who can I contact?
You
may contact Household's Customer Service Department
at 888-395-6000 or visit Household's website
at www.householdfinance.com
or Beneficial's Customer Service Department at
800-957-0003 or visit Beneficial's website
at www.beneficial.com.
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36. Does the settlement provide for other relief
besides the settlement payment?
Yes,
in addition to the settlement payments being made,
Household has agreed to change its business practices
regarding the following:
- Multiple
real estate secured loans that are made at or
near the same date to the same borrower (i.e.,
"split loans")
- Loan
points and origination fees
- Interest
rates, monthly payment amounts
- Single
premium credit and other insurance products
- Single
premium credit life and other insurance products
- Prepayment
penalties
- Loans
offered through a negotiable check (i.e., "live
checks")
- Home
equity lines of credit
-
Loan billing practices relating to simple interest
calculations, balloon payments, pay off information,
EZ Pay
- Non-English
languages documentation
- Net
tangible benefit in loan refinancing.
The
full Consent Judgment and Order entered into between
the New Jersey Attorney General and the New Jersey
Division of Banking and Household can be viewed
on the State's website at www.nj.gov/lps/householdsettlement.
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37. Is there prepayment penalty relief?
Under
the terms of the settlement, Household has unilaterally
modified its prepayment penalty provisions. Any
prepayment penalty provision now existing in any
Household or Beneficial real estate secured loan
made on or after January 1, 1999 will now be in
effect only for the first 24 months of the real
estate secured loan regardless of what the loan
documents say. Household and Beneficial notified
borrowers of changes to the prepayment penalty
provision in their loans in February 2003.
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38. What does this [word] mean?
- Annual
Percentage Rate or APR - the measure
of the cost of credit expressed as a yearly
rate, calculated according to the provisions
of the federal Truth-in-Lending Act, 15 U.S.C.
§1601, et seq., and the regulations promulgated
there under.
- Balloon
Payment - a scheduled final payment that
is more than twice as large as the average of
earlier scheduled monthly payments.
- Borrower
- an individual who has consummated with
Household a real estate secured loan transaction.
- Closing
- the process during which a Borrower executes
a note and security instrument regarding a lien
on real property that is subject to a mortgage
loan.
- Consent
Judgment - The binding and enforceable
judgment regarding the Lending Practices for
the Covered Transactions between New Jersey
and Household, entered in the Superior Court
of New Jersey, Chancery Division, Essex County
on December 15, 2002.
- Covered
Loans - the real estate secured loans, including
Personal Homeowner Loans, and also includes
those unsecured Live Check loans which were
paid off with the proceeds of a Household real
estate secured loan, originated by Household's
retail lending branches during the period January
1, 1999 through September 30, 2002.
- Discount
Points - points paid by the Borrower at
the time of origination of a mortgage loan for
the purpose of reducing the interest rate or
time-price differential applicable to the loan.
- Home
Equity Line of Credit or HELOC -an
open-end line of credit, as defined in Truth
in Lending Regulation Z, 12 C.F.R. §226.2(a)(20),
that is secured by real estate.
- Loan
to Value Ration -
the amount borrowed divided by the appraised
value of the property, expresed as a percentage.
- EZ
Pay - Household's automatic withdrawal program
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39. How do I contact the Settlement Administrator?
You
may reach the Settlement Administrator by calling
a toll free number, 888-780-2156, or contacting
the Settlement Administrator's website, www.household-beneficial-settlement.com.
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