Frequently Asked Questions

Q: Am I being sued?

A: No. You are not being sued.

Q: What is the Action about?

A: On January 31, 2008, Named Plaintiff Kyle Liguori filed a class action complaint against Defendants in the United States District Court for the Eastern District of Pennsylvania, styled Liguori v. Wells Fargo & Company, et al,. No. 5:08-cv-00479-PD (E.D. Pa.) (the “Action”) in federal court in Pennsylvania. The Action names Wells Fargo, Wells Fargo Bank and North Star Mortgage Guaranty Reinsurance Company (“North Star”) as Defendants. Named Plaintiff Tammy Hoffman joined the Action on January 10, 2011.

The Named Plaintiffs in this Action allege that Defendants entered into “captive reinsurance arrangements” for the purpose of receiving kickbacks, referral payments and unearned fee splits (disguised as “reinsurance premiums”) from private mortgage insurers to whom Wells Fargo referred borrowers in violation of Section 8 of the federal Real Estate Settlement Procedures Act of 1974, 12 U.S.C. §§ 2601 et seq (“RESPA”). Portions of the mortgage insurance premiums paid to North Star, Wells Fargo’s-affiliated “lender captive reinsurer” who, Named Plaintiffs allege, assumed very little or no risk under the reinsurance contracts and, therefore, did not provide real or commensurately priced reinsurance in violation of RESPA.

Q. Why am I Getting this Notice?

A. You are getting this notice because you obtained a residential mortgage loan from Wells Bank and paid for Private Mortgage Insurance which was reinsured by North Star. On August 31, 2012, the Court entered an Order preliminarily approving the Settlement, preliminarily certifying a class and appointing the Named Plaintiffs as class representatives for settlement purposes only, appointing Kessler Topaz Meltzer & Check, LLP as Lead Class Counsel and Bransom, Plutzik, Mahler Birkhaeuser, LLP, Berke, Berke & Berke, and Travis, Calhoun & Conlon as Class Counsel (collectively, “Plaintiffs’ Counsel”), ordering notice of the Settlement to Class Members and approving the form and manner of class notice, and setting a date for a Final Approval Hearing on January 28, 2013.

Q: What is the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq.?

A: The Real Estate Settlement Procedures Act of 1974, 12 U.S.C. §§ 2601 et seq or RESPA is a federal law concerning, among other things, mortgage closing costs and settlement procedures. RESPA requires that consumers receive certain disclosures at various times during their mortgage transaction and outlaws kickbacks that tend to increase the cost of settlement services. More information about RESPA can be found at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/rmra/res/respa_hm.

Q: What is a Reinsured Loan?

A: In this Action, as defined in the Settlement Agreement (“Agreement”), a reinsured loan means a residential mortgage loan originated during the Class Period (March 7, 2006 through January 1, 2008) by Wells Fargo Bank and reinsured by North Star or its subsidiaries, on which the Class Member is or was on obligor, excluding residential mortgage loans originated by Wells Fargo Bank’s Correspondent Lending Division or otherwise purchased on the secondary market.

Q. What is the difference between Mortgage Insurance (“MI”) (or Private Mortgage Insurance (“PMI”)) and Reinsurance?

A: Mortgage Insurance (or Private Mortgage Insurance) protects mortgage lenders against default by the borrower. Mortgage lenders generally require that borrowers obtain PMI if they have a low down payment—usually less than 20% of the cost of the property. The PMI company, in order to reduce its underwriting risk, sometimes passes part of this risk to another insurance company, by purchasing reinsurance on a percentage of the mortgage insurance.

Q: What is the amount of the Settlement?

A: Defendants have agreed to provide $12,500,000 (twelve million five hundred thousand dollars) to establish a Settlement Fund. Subject to, and in accordance with, the terms and conditions of the Agreement, the Settlement Administrator or Defendants shall provide to each Participating Class Member their distribution of the Net Settlement Amount (“Settlement Payment”).

Q: What amounts are being deducted from the Settlement Fund?

A: The Settlement Fund will be used to pay: (a) Settlement Payments to Participating Class Members, as awarded by the Court and subject to the procedures set forth in the Agreement; (b) attorneys’ fees in an amount not to exceed 30% of the Settlement Fund and reimbursement of the litigation costs/expenses of Plaintiffs’ Counsel, as awarded by the Court; (c) Case Contribution Awards of the Named Plaintiffs for their services for acting as class representative in the Action, as approved by the Court and not to exceed $7,500 each; (d) fees and costs of the Settlement Administrator, including the costs of Class Notice; and (e) any other Administrative Costs incurred in connection with the implementation of the Agreement.

Q: Who is eligible to receive a Settlement Payment?

A: All borrowers with residential mortgage loans closed on or after March 7, 2006 through January 1, 2008 that were originated by Wells Fargo Bank and reinsured by North Star or its subsidiaries, excluding borrowers with residential mortgage loans originated by Wells Fargo Bank’s Correspondent Lending Division or otherwise purchased on the secondary market.

Q: How much money will I receive?

A: Participating Class Members’ Settlement Payments will be determined using a formula as set forth in the proposed Plan of Allocation. If approved, only one check will be issued per Reinsured Loan, regardless of the number of co-borrowers on the loan. For more details, please refer to the proposed Plan of Allocation.

Q: I cannot find my paperwork. How can I file a claim?

A: You do not need to file a claim. If you are a Class Member and would like to participate in the Settlement, you do not need to do anything. Defendants will provide to Lead Class Counsel and the Settlement Administrator relevant information needed to identify Class Members and calculate the Settlement payments.

Q: I have more than one Reinsured Loan. How much will I receive?

A: A Class Member with more than one Reinsured Loan during the Class Period shall be entitled to a separate Settlement payment for each Reinsured Loan.

Q: There is more than one borrower on my Reinsured Loan. Will each of us get a payment?

A: No. Co-borrowers entitled to payment on account of the same Reinsured Loan shall only receive one Settlement Payment jointly to all such co-borrowers. In the event there are multiple Class Members listed as obligors to a Reinsured Loan entitled to a Settlement Payment and there are multiple addresses listed for those Class Members, the check shall be mailed to the address associated with the Reinsured Loan. Defendants, Named Plaintiffs, and their respective counsel shall have no liability to any co-borrower arising from any claim regarding the division of such funds among co-borrowers.

Q: Who are the lawyers handling the case?

A: The Court has preliminarily appointed, for the purpose of the proposed Settlement only, the following as Lead Class Counsel for the Class:

Edward W. Ciolko, Esq.
Terence S. Ziegler, Esq.
KESSLER TOPAZ MELTZER & CHECK, LLP
280 King of Prussia Road
Radnor, PA 19087

Q: I do not want to participate in the lawsuit and/or I want to bring my own lawsuit. How do I exclude myself from this Settlement?

A: You may request exclusion, or “opt-out,” from the Settlement Class. If you elect to be excluded from the Settlement Class, you will not be bound by any judgment or Settlement of the Action nor will you receive any of the benefits, including the payment of any monies. You will retain and be free to pursue any claims you may have on your own behalf. If you wish to exclude yourself from the Settlement Class, you must mail a written opt-out notice to the Settlement Administrator addressed as follows:

Liguori, et al. v. Wells Fargo & Company Settlement
c/o GCG
P.O. Box 9892
Dublin, OH 43017-5792

Requests for exclusion do not need to be in any particular format; however, the request must state that you intend to “opt-out” or request “exclusion” from the Class and the request must be signed personally and contain the full name, current address, loan number (if available) and telephone number of the person or persons requesting exclusion. The written opt-out must be sent by U.S. Mail, first-class and postage prepaid, postmarked on or before October 18, 2012 to the Settlement Administrator. If more than one person was obligated on the loan, then the opt-out notice needs to be signed by all obligors on the loan in order to be valid.

Q: I do not agree with this Settlement. How do I object to the Settlement?

A: If you do not exclude yourself from the Settlement Class, you may object to any aspect of the proposed Settlement. Any Class Member who objects to all or part of the proposed Settlement and wants the Court to consider his or her objection, must file such objection and any supporting papers with the Clerk of the Court on or before January 14, 2013 at the following address:

Clerk
United States District Court for the Eastern District of Pennsylvania
601 Market Street, Room 2609
Philadelphia, Pennsylvania 19106

The objection must set forth the full name, current address and telephone number of the person making the objection and must include: (a) a written statement of the position the objector wishes to assert; (b) a written statement of the grounds thereof; (c) copies of any papers, briefs, or other documents the objector wishes to submit in support of his/her position. Copies of the objection and supporting papers must be mailed or hand delivered to:

Lead Class Counsel
Edward W. Ciolko, Esq.
Terence S. Ziegler, Esq.
KESSLER TOPAZ MELTZER & CHECK, LLP
280 King of Prussia Road
Radnor, PA 19087

Counsel for Defendants
Michael J. Steiner, Esq.
SEVERSON & WERSON, P.C.
One Embarcadero Center
Suite 2600
San Francisco, CA 94111

Objections must be postmarked by January 14, 2013. Any Class Member who intends to appear personally (or through separate counsel if a timely and proper Entry of Appearance is filed) to object to the Settlement on any grounds whatsoever at the Final Approval Hearing on January 28, 2013, must file with the Clerk of the Court, at the address listed above, a Notice of Intention to Appear. The Notice of Intention to Appear must be filed on or before January 14, 2013, and copies of the Notice of Intention to Appear must be mailed or hand delivered to Lead Class Counsel and Counsel for Defendants, at the addresses listed above. Any Class Member who does not file and serve a Notice of Intention to Appear will be prohibited from speaking at the Final Approval Hearing concerning this Settlement. Any Class Member who does not file an objection in the time and manner described above is forever foreclosed from raising any objection to such matters in the event the Settlement is approved.

Q: How do I find out more information about the Settlement?

A: If you still have questions about the Settlement, please send an email to: WellsFargoPMIsettlement@ktmc.com. This e-mail will go to Kessler Topaz Meltzer & Check, LLP, Lead Class Counsel and will be directed to the individuals handling the Settlement. Lead Class Counsel has also set up a toll free number, (888) 246-3270, if you prefer to call with your questions.