This mortgage company may owe you one

Tools

Story Published: Sep 24, 2007 at 9:25 AM PST

By Connie Thompson

Video

A piece of junk mail you might have thrown away years ago is now at the heart of a proposed multi-million dollar consumer settlement.

But don't start counting the cash just yet. It's all part of one of the most baffling deals I've ever come across.

A legal notice just went out to millions of consumers across the country. It's a three-page, double-sided settlement notice about solicitations from a mortgage company called Finance America.

If you were solicited between March 2nd of 2003 and December 18th of last year, you may be entitled to benefits.

The law firm that filed the class action suit is in California. If the settlement is approved, Markun, Zusman and Compton will get up to $3.5 million in legal fees.

I found their phone number on the internet and called to find out what consumers get.

Edward Zusman told me Finance America went through the credit bureaus to get pre-screened mailing lists.

But a number of lawsuits claim Finance America never used that pre-screened information to offer actual mortgage loans; the mailings were just advertising. That violates the Fair Credit Reporting Act.

Finance America denies the allegations.

As for the settlement, consumers won't get cash back, according the law firm's recorded message:

"The settlement is a non-cash settlement. Instead, you have the opportunity to apply to receive a mortgage loan from Finance America on favorable terms."

To sum it up, the company got sued and settled, but then they get the benefit of people in the settlement class to come and do business with them -- what?

Attorney Ed Zusman says it's best deal they could get.

Consumers who apply and qualify for a loan will get what amounts to a wholesale rate without the normal brokers' markup.

"And as a result, they will save several thousand dollars."

Attorneys said under the Fair Credit Reporting statutes, if the deal involved a cash settlement, consumers wouldn't be rewarded more than $1,000.

The proposed settlement has to be approved and eligible consumers who want a loan must make their intentions known by October 22nd.

For More Information:

Finance America Settlement

Current Weather

Current Temp 34.0 °F

Mostly Cloudy

Video

More Weather

Current Weather

More Weather

Upload directly from your mobile device.

Learn how

YouNews

This content requires the latest Adobe Flash Player and a browser with JavaScript enabled. Click here for a free download of the latest Adobe Flash Player.