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What is this lawsuit about?
The Defendants in the lawsuit are Nationstar Mortgage LLC and Veripro Solutions Inc. The lawsuit challenges defendants’ practices in allegedly attempting to collect balances on California purchase money second mortgages and home equity credit lines after foreclosure and short sales. The case also challenges Nationstar’s practices in reporting such loans to the credit reporting agencies after a foreclosure or short sale has taken place. A “short sale” happens when a lender approves your sale of your property to another person for less than the amount owed on your loan or loans. Defendants strongly deny any claims of wrongdoing but have agreed to settle the lawsuit to avoid the burden and cost of further litigation.
Who is included?
The proposed Settlement provides for two Subclasses, a Collection Letter Subclass and a Credit Reporting Subclass. You may be a member of either or both Subclasses:
Collection Letter Subclass: You are a member of this Subclass if you obtained a second mortgage, or home equity line of credit, secured by a deed of trust on property located in California (a) to purchase a home (b) for four units or fewer and which (c) was occupied entirely or in part by you, and, (d) after a foreclosure or short sale of the home, Defendants sent you certain Collection Letter(s) between March 24, 2013 and January 8, 2021.
Credit Reporting Subclass: You are a member of this Subclass if you had a purchase money second mortgage, or home equity line of credit as defined above, and Nationstar reported that loan to one or more of the credit reporting agencies as having an outstanding balance owing and/or otherwise as currently delinquent following a foreclosure or short sale between March 24, 2013 and January 8, 2021.
What does the Settlement provide?
Under the proposed Settlement, Defendants will automatically pay each member of the Collection Letter Subclass $150. Defendants will automatically refund to each member of the Collection Letter Subclass any amounts paid to Veripro on the loan after a Collection Letter was sent. Defendants agree to make no further attempts to collect on the loans of the qualifying members of both Subclasses and will not sell or assign those accounts to any third party. If you qualify under the Settlement, Nationstar will submit requests to the credit bureaus to update the reporting of your loan to reflect a zero current balance and zero amount past due. Depending on your circumstances, this may improve your credit score.
However, unless you are a member of the Collection Letter Subclass and your loan was previously serviced by Nationstar, you must qualify for and request this update by filling out and timely submitting the Claim Form. If you do not timely submit a completed Claim Form, Nationstar will not request any credit reporting change for you, even though you will still be bound by the terms of the Settlement.