Lyons FPI Settlement Website
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Welcome to the Settlement website for Lyons, et al., v. Litton Loan Servicing, LP, et al., Case No: 13-cv-00513 (the “Lyons Action”).  This website has been established to provide general information related to the Settlement.  The capitalized terms used on this website and not defined herein shall have the same meanings ascribed to them in the Settlement Agreement (“Agreement”).

 



UPDATE:

Class Counsel is pleased to announce that the 30-day mandatory appeal period has expired with no appeals having been filed. The Settlement is now Final and Effective. Settlement Payment checks are scheduled to be mailed out to eligible Class Members at the end of October.

Additional updates will be posted as they arise.

 



 

This settlement is the second settlement in the above-referenced lawsuit.

 

Plaintiffs first settled with Defendants who provided the insurance that was force-placed on Settlement Class Members’ properties.  They are referred to as the “AMIG Defendants.” You can find information regarding that settlement at www.LyonsInsurerFPIsettlement.

 

The second set of settling Defendants are Litton Loan Servicing LP, The Goldman Sachs Group, Inc. and/or Arrow Corporate Member Holdings LLC.  They serviced the mortgage loans of Settlement Class Members. They are referred to as the “Litton Defendants.”  This website provides the information and court documents related to the Litton Defendants settlement.

 

Settlement Class Members in the first settlement are also Class Members in this settlement.

The Litigation

This lawsuit involves Lender Placed Insurance, or LPI, which is hazard, wind, and/or flood insurance placed on a homeowner’s property to protect the borrower and mortgage lender when the homeowner’s insurance policy lapses or when the homeowner does not maintain a required insurance policy that is acceptable to the mortgage lender.  When an LPI Policy was placed, Litton paid a premium to the LPI insurer, and then Litton charged the homeowners for the cost of that premium.

The Plaintiffs alleged that when a borrower was required to have insurance for his or her property pursuant to a residential mortgage, and evidence of acceptable coverage was not provided, (for example, when the insurance policy did not exist or had lapsed), Litton would place insurance in a manner that enabled it to obtain an unauthorized benefit.  The Plaintiff also alleged that the way in which LPI was obtained and placed caused the LPI charges and the amount of coverage to be excessive.

 

The Plaintiffs brought claims on behalf of all persons in the Settlement Class defined as:

 

All Borrowers who had a residential mortgage loan or line of credit on property in the United States owned, originated and/or serviced by Litton Loan Servicing LP, The Goldman Sachs Group, Inc. and/or Arrow Corporate Member Holdings LLC and in connection therewith, were charged for lender-placed hazard, wind and/or flood insurance.

The following are excluded from the Settlement Class:  (a) individuals who are or were during the Class Period officers or directors of the Litton Defendants or any of their respective subsidiaries or Affiliates; (b) any justice, judge or magistrate judge of the United States or any State, and their spouses; and (c) borrowers whose LPI Policy was cancelled in its entirety such that any premiums charged and/or collected were fully refunded or credited to the borrower or the borrower’s escrow account.

The "Class Period" begins on January 1, 2006 and continues through April 20, 2016.

The “Class Period” begins on January 1, 2006 and continues through April 20, 2016.

 

The Settlement

The Litton Defendants have agreed to pay $4,121,000 (Four Million, One Hundred Twenty One Thousand U.S. Dollars) to establish a Settlement Fund from which will be deducted the following payments: (a) the service awards to Jimmy and Jacqueline Lyons and  Sheila Heard, if approved by the Court; (b) attorneys’ fees and expenses if awarded by the Court; and (c) settlement administration costs. The remaining balance will be the Net Settlement Fund. 

 

Each Settlement Class Member will be entitled to a pro rata share of the Net Settlement Fund in proportion to their Individual Net Premium over the Total Net Premium charged to all Settlement Class Members, after accounting for Minimum Level Payment Recipients, as those terms are defined in the Settlement Agreement, with a Minimum Level Payment of $2.00. Additionally, second settlement payments may be issued after the first settlement payments if the balance remaining in the Net Settlement Fund exceeds a certain level.  Settlement Class Members do not need to submit a claim form in order to receive a settlement payment. 

 

The Court has preliminarily approved the Settlement.  A Final Approval Hearing will be held on August 12, 2016 at 11:00 a.m. in Courtroom 1306 at the Thurgood Marshall United States courthouse at 40 Foley Square, New York, NY  10007.  At the Hearing, the Court will consider whether the proposed Settlement is fair, reasonable and adequate and whether to approve Class Counsel’s request for attorneys’ fees and costs and service awards. 

 

Further information and updates will be posted on this Settlement Website.  Please check back periodically throughout the Settlement process. 
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