Settlement Loans will be available to class members if and when the settlement of the case becomes effective.

A Settlement Loan is a residential mortgage that will be made to qualified borrowers at a favorable interest rate and with a single fully disclosed fee to be paid to and retained by the lender. Settlement Loans will be available only for homes within the United States.

Settlement Loans will be made by a Designated Lender that works through mortgage brokers. Class members will be permitted to select from any of the mortgage products that the lender is offering to the general public at the time the Class Member applies for a loan. The lender is expected to offer a wide range of fixed and variable rate mortgages, as well as a range of time periods (30 years, 20 years, 15 years) over which the mortgage may be paid off.

The lender that was first designated to make Settlement Loans (BNC Mortgage) has since closed down. The parties are in the process of trying to identify a substitute lender who would offer Settlement Loans on at least as favorable terms as the terms BNC Mortgage would have offered at the time the Settlement Loan is made. Once that process is finished, both the settlement website and information on the toll free phone line will be updated. In the meantime, you may still register for Settlement Loans. Registered class members will be contacted by their preferred means of contact with updated information about the case.

The interest rate on a Settlement Loan will be the “wholesale par rate” that the Designated Lender is charging at the time the Settlement Loan is made on non settlement loans on which the borrower is paying all of the mortgage broker’s fee. A Settlement Loan borrower will not have to pay a mortgage broker fee (which is often 2% of the loan amount or more) in order to get the “wholesale” interest rate. A Settlement Loan borrower and the property against which they seek to borrow will have to meet underwriting criteria customary in the marketplace at the time the application is made. The borrower will also be required to pay those third party charges (such as appraisal fees and title insurance) that a borrower ordinarily pays on a home loan. The only fee paid to and retained by the lender will be a fixed fee of $1,500.

Experts are expected to offer opinions to the Court stating that Settlement Loans would likely save borrowers hundreds, and in some cases thousands, of dollars compared to other loans available to them when the Settlement Loans will be made.