Household-Beneficial FAQ
Settlement Questions and Answers for Floridians

Introduction

On December 16, 2002, the Attorney General's office filed court documents to implement an Agreement in Principle with Household International. The agreement is intended to resolve concerns raised about the lending practices of its subsidiaries, including Household Finance Corporation ("Household") and Beneficial, Inc. ("Beneficial"). On August 15, 2003, the Release and Agreement to Participate in Household/Beneficial Settlement Forms were mailed out to Florida consumers who are eligible to receive a payment.

  1.  What is the purpose of this Settlement?
  2.  What makes a consumer eligible to participate?
  3.  Who determines eligibility to participate?
  4.  Will every qualified Florida consumer who returns a signed
       release receive payment under the restitution plan?
  5.  How much money was received by the State of Florida under
       the settlement?
  6.  How many Florida consumers are affected by the settlement?
  7.  What is the total Settlement fund?
  8.  Are there any components of the Settlement affecting
       borrowers, other than monetary relief?
  9.  The notice and release form I received from the settlement
       administrator mentions injunctive relief, what does that mean
       and will it increase the amount of money I receive under the
       settlement?
10.  What is the deadline for returning my Release?
11.  What do you think of the Settlement?
12.  Can you give me advice on whether I should sign the Release?
13.  What if I don’t want to participate in this Settlement?
14.  How do I obtain more information on this Settlement?
15.  What do I need to do to participate in the Settlement?
16.  How will I know if my Release form has been received?
17.  I lost my Release form. Can you mail me another one?
18.  How much money will I receive if I participate in the
      Settlement?
19.  If I have more than one loan with Household were all loans
      considered in determining how much money I receive?
20.  How was this amount calculated?
21.  Am I going to receive the minimum payout reflected in the letter
      or could I receive more money?
22.  What factors were used by the Attorney General to determine
      the amount of payment to each consumer and how was my
      payment calculated?
23.  Was the type of loan I obtained from Household/Beneficial
      used in determining how much money I receive under the
      settlement?
24.  Was the amount of my original loan balance considered when
      determining how much money I receive?
25.  If my loan had a co-borrower do we both need to sign the
      Release form?
26.  I had a co-borrower but cannot get a signature (due to divorce,
      estrangement, etc.), what are my options?
27.  I am the guardian or executor of the estate of (claimant name)
      and he/she was sent a Release form for this Settlement. How
      can the form be completed?
28.  Why did I receive more than one Release packet?
29.  I have not received my Release packet from my State
      Official(s), but I think I may be eligible.
30.  When will I receive my payment?
31.  Will my information be kept confidential?
32.  What if my loan is not a real estate loan? Can I still be included
       in this Settlement?
33.  I have a real estate loan that I opened on (any date prior to or
      after the date covered by the Settlement agreement). Am I
      included in this Settlement?
34.  Can I take the signed Release form to my Household (or
       Beneficial) Branch Office or State Official’s Office?
35.  Can I fax my Release form to my Household (or Beneficial)
       Branch Office or State Official’s Office?
36.  I have already paid off my Household (or Beneficial) real estate
      secured loan. Am I still included in this Settlement?
37.  My real estate secured loan is open and I’m still making
      payments to Household (or Beneficial). Am I still included in
      this Settlement?
38.  If I sign this Release from, does this mean that I don’t have to
      continue to make payments on my loan?
39.  I want to payoff my Household (or Beneficial) loan. How can I
       find out what my payoff balance is?
40.  I have other questions regarding my Household (or Beneficial)
       loan. Who can I contact?
41.  What if my home is in foreclosure or has gone through
       foreclosure?
42.  Do I have to pay taxes on the settlement payment I will be
       receiving?
43.  How do I notify the Administrator that my mailing address has
      changed so that I am certain to receive my check?
44.  If I accept the restitution payment can I still file a law suit
       against Household/Beneficial or join a class action lawsuit if I
       feel my damages were more than the amount I receive?
45.  Am I entitled to receive payment under the restitution plan if I
       assumed the loan from someone else?
46.  Who must sign the release if my spouse and I are both on the
       loan documents, but we are no longer married?
47.  I am refinancing or selling my home and the payoff from
       Household/Beneficial contains a prepayment penalty. Do I have
       to pay the prepayment penalty?
48.  I modified my loan with Household/Beneficial to lower the
      interest rate. Could this affect the amount of money I receive
      under the settlement?
49.  I received a foreclosure notice from Household/Beneficial, will
      the settlement stop the foreclosure action?

1. What is the purpose of this Settlement?
This Settlement was entered on December 16, 2002 and was a result of investigations by the States and the District of Columbia into allegations of unfair and deceptive mortgage lending practices by Household and Beneficial. This Settlement will provide partial relief to borrowers in connection with real estate secured loans obtained from Household or Beneficial.

2. What makes a consumer eligible to participate?
You must have obtained a real estate secured loan (i.e. a mortgage loan or home equity loan) from a Household or Beneficial retail-lending branch between January 1, 1999 and September 30, 2002. This includes loans that were opened during this time period regardless of whether or not the loan is currently open or closed. Each State has determined its own payment plan for eligible consumers, and it is possible that some State plans may not cover all mortgage loans.

3. Who determines eligibility to participate?
Each State has set eligibility standards for its borrowers who obtained real estate secured loans (i.e. mortgage loans or home equity loans) in that State. Any borrowers who receive a Release form have already been determined by their State to be eligible to participate.

4. Will every qualified Florida consumer who returns a signed release receive payment under the restitution plan?
Yes, every Florida consumer who had a loan originated with Household/Beneficial or one of it’s subsidiaries between January 1, 1999 and September 30, 2003, was allocated a minimum payment to allow them to share in the settlement with Household Finance.

5. How much money was received by the State of Florida under the settlement?
Florida consumers received approximately $23 million dollars in restitution.

6. How many Florida consumers are affected by the settlement?
There were approximately 41,000 consumers with loans that originated by Household/Beneficial between January 1, 1999 and September 30, 2002.

7. What is the total Settlement fund?
The total Settlement fund is $484,000,000. It has been divided among the 50 States and the District of Columbia based on the total dollar amount of the real estate secured loans made in each State. Each State will take its share of the Settlement fund and distribute it to that State’s eligible borrowers.

8. Are there any components of the Settlement affecting borrowers, other than monetary relief?
Yes, Household and Beneficial have agreed to change their business practices. As part of these changes, all prepayment penalty provisions have been modified. Any prepayment penalty provision now existing in any Household or Beneficial real estate secured loan made on or after January 1, 1999 will now be in effect only for the first 24 months of the real estate secured loan regardless of what the loan documents say. Household and Beneficial notified borrowers of changes to the prepayment penalty provision in their loans in February 2003.

9. The notice and release form I received from the settlement administrator mentions injunctive relief, what does that mean and will it increase the amount of money I receive under the settlement?
The injunctive relief obtained in the settlement is valued at over $60 million. Injunctive relief requires Household/Beneficial to modify its practices and policies to prevent abuses in the future. You will not see injunctive relief in the form of a cash payment, but you will see significant changes in the way that Household/Beneficial and its affiliates will conduct business, and those changes may benefit you in the future. Some of the policies that will change are:

    1) Loan fees will not exceed 5% of the original loan amount. This provision of the consent decree signed by Household will remain in force for a period of three (3) years. 

    2) Prepayment penalties will not exceed 24 months in duration. A written disclosure of the terms of the prepayment penalties charged must be provided at the time the Good Faith Estimate of Settlement Charges is issued to the consumer. 

    3) Points will no longer be charged when a borrower is refinancing an original Household/Beneficial loan within 12 months of the date of the original loan. 

    4) Household/Beneficial shall fully disclose the optional nature of its insurance products. Household/ Beneficial will disclose to the consumer the amount of the insurance premiums and shall fully explain the terms and limitations of the insurance coverage. 

    5) Household shall refrain from any deceptive practices that would misrepresent the interest rate or financing terms to consumers and shall provide fair, accurate and non-deceptive disclosures to consumers.

    6) Household shall make no representations about accelerated payment plans, such as the EZ Payment and Skip a Payment Plans without providing the consumer with an accurate, full and clear disclosure about the way these plans affect the amortization of the loan, as well as, the potential for a large final balloon payment if the full payment is not made as agreed. 

    7) Household cannot convert bi-weekly mortgage payments to bi-monthly payments without consumer’s permission. 

    8) Household will disclose on the face of live checks, that signing the check will result in a loan and cannot charge a prepayment penalty on live check loans.

    9) Household must give consumers the best interest rate available for which the consumer qualifies based upon the loan product or program under which the consumer applied. 

    10) Household must provide accurate payoff quotes within 5 business days from receipt of a written request or as required under applicable state law.

10. What is the deadline for returning my Release?
The deadline for returning a signed Release Form is October 14, 2003. Forms mailed after this date may not be accepted.

11. What do you think of the Settlement?
We are a neutral party that has been hired as the Administrator for this Settlement. I cannot offer my opinion.

12. Can you give me advice on whether I should sign the Release?
No, the Settlement Administrator cannot give legal or other advice. If you would like advice, please consult a private attorney of your choosing.

13. What if I don’t want to participate in this Settlement?
Simply do not complete the Release form. Nothing else is required. By completing a Release Form, you are agreeing to participate in the Settlement. If you do not return a signed Release form, you have not agreed to participate and will automatically be excluded from the Settlement and will not receive a Settlement payment. Please understand that if you sign the release to accept payment, you will give up your right to sue Household/Beneficial for issues related to this settlement. However you may affirmatively or defensively assert claims or defenses relating to a foreclosure of your home.

14. How do I obtain more information on this Settlement?
You may go to the Settlement Administrator’s website at www.household-beneficial-settlement.com to obtain general information about the settlement, and also link for more information about your State.

15. What do I need to do to participate in the Settlement?
Borrowers who are eligible to participate will receive a letter and Release form from their State Official(s). As explained in the letter, borrowers need only fill out, sign and return the Release form in the postage pre-paid envelope provided by October 14, 2003 in order to participate. Borrowers should retain the “borrower copy” of the Release for their own records. The letter describes what to do if there is more than one borrower listed on a given loan.

16. How will I know if my Release form has been received?
You may contact the Settlement Administrator at 1-888-780-2156 or the Settlement Administrator’s website, www.household-beneficial-settlement.com to check on the status of your Release form. Once you reach the website, there is an option to contact the Administrator via email. The Settlement Administrator will receive your email and respond as quickly as possible (by email or phone). Please wait one week from the time you return your Release before contacting the Settlement Administrator to see if your Release has been received.

The Settlement Administrator will contact you if there are any questions or problems with your Release form.

17. I lost my Release form. Can you mail me another one?
Yes, if you were part of the original mailing, we can arrange to have another letter and Release form sent to you. 

You may contact the Settlement Administrator at 1-888-780-2156 or the Settlement Administrator’s website, www.household-beneficial-settlement.com to request another Release packet. Once you reach the website, there is an option to contact the Administrator via email. You can request another Release packet by emailing the Settlement Administrator. After receiving your e-mail, the Settlement Administrator will confirm that you are eligible to participate in the Settlement and then will send you another Release packet as soon as possible.

18. How much money will I receive if I participate in the Settlement?
Each State has developed its own plan for distributing the Settlement funds it received. The minimum payment you are eligible for is on the Release Form you received with the notice letter. You may get more than this amount, depending on the number of borrowers in your State who decide to participate in the Settlement, but you will not get less than this minimum amount.

No, we cannot determine how many consumers will ultimately respond within the required time frame; therefore we cannot calculate the exact amount of your payout until after the response period expires.

19. If I have more than one loan with Household were all loans considered in determining how much money I receive?
Yes, each loan was considered when determining the harm sustained by consumers. Only those loans that were made by Household/Beneficial between January 1, 1999 and September 30, 2002 were considered.

20. How was this amount calculated?
The amount was calculated based on the restitution plan adopted by your State. You can get more information about your State’s restitution plan by accessing the Settlement Administrator’s website at www.household-beneficial-Settlement.com, and then going to the link to your State.

21. Am I going to receive the minimum payout reflected in the letter or could I receive more money?
You could receive more than the amount reflected in your letter. Because the payout is based upon the number of consumers who respond within the required time frame, as well as, the type of harm you sustained.

22. What factors were used by the Attorney General to determine the amount of payment to each consumer and how was my payment calculated?
The Attorney General determined there were seven major areas where consumers were harmed. We then assigned each of the seven areas of harm a point value. We then looked at each loan and gave the loan points based on them number of harms that occurred in that loan. The seven areas of harm are:

    1) If you had a first and second mortgage within 90 days of each other you received points. 

    2) If you received one or more loans from Household/Beneficial in which the balance you owe was more than the value of the property securing the loan you received points. 

    3) If you obtained more than one loan from Household/Beneficial during the three-year period you received points.

    4) If you paid for optional insurance, such as life insurance, credit and health insurance, real estate insurance, unemployment insurance or property insurance in a lump sum and did not receive a refund of the premium or payment under a valid claim, you received points.

    5) If you are paying an interest rate above 16% you received points. 

    6) If you paid a prepayment penalty more than two years after obtaining the mortgage in an amount greater than $100 you received points. 

    7) If you paid points at closing that represented more than 4% of the original loan amount you received points.

23. Was the type of loan I obtained from Household/Beneficial used in determining how much money I receive under the settlement?
All mortgage loans were considered, whether they were personal homeowner lines of credit or typical mortgages. Consumer loans and credit cards were not included under the settlement.

24. Was the amount of my original loan balance considered when determining how much money I receive?
Yes, consumers with loan balances above $50,000.00 earned additional points to increase the payout and for consumers with loan balances of $30,000.00 or less there was a limitation placed on the amount of points allocated to reduce the payout. These adjustments were warranted so that the payout for each consumer would bear some relationship to the actual amount of damages sustained.

25. If my loan had a co-borrower do we both need to sign the Release form?
Yes, all borrowers who signed the original loan documents must sign the Release form in order to receive payment. If there is more than one borrower on the loan, the Release form will not be valid with only one signature. If there is more than one borrower, payment cannot be made to one or another of the co-borrowers, but must be made to both (assuming both borrowers can sign the form – see below).

26. I had a co-borrower but cannot get a signature (due to divorce, estrangement, etc.), what are my options?
If you’ve made every effort to obtain the co-borrower’s signature, but cannot get it, you should sign and send in the Release form with a letter attached explaining the circumstances as to why the co-borrower signature cannot be completed. The States and Household or Beneficial will review your submission, and you will be notified of their decision. If your submission is accepted, payment will be made to you alone (without the other borrower’s name appearing on the check).

27. I am the guardian or executor of the estate of (claimant name) and he/she was sent a Release form for this Settlement. How can the form be completed?
Sign and date a letter explaining the circumstances and attach this letter to the Release form, along with photocopies (please do not send in original legal documents) of any other legal documentation showing you as the guardian or executor of the estate of (claimant name). Return the letter, copies of documents and Release form to the Administrator, along with the address where payment should be sent, before October 14, 2003. The States and Household or Beneficial will review your submission, and you will be notified of their decision. If your submission is accepted, payment will be made payable to "The Estate of (claimant name)."

28. Why did I receive more than one Release packet?
Approximately 1,246 Florida consumers had more than one loan with Household/Beneficial during the covered time period. Many of those consumers will receive more than one notice and release form. One Release form for each transaction was sent to the consumer’s address. You are eligible for restitution for EACH covered transaction therefore you must sign and return EACH release form that you receive.

Borrowers who have more than one real estate secured loan with Household or Beneficial, but obtained one loan individually and the other(s) with a co-borrower, or had different co-borrowers on the loans (for example, a spouse was the co-borrower on one loan and a brother or sister was the co-borrower on a second loan), will receive separate Release Packets for each loan. These borrowers must sign and return each Release form included in each separate Release Packet in order to receive a payment on all covered loans. If there is a problem with getting a co-borrower's signature, please follow the procedure set forth in Question 18 above. Please make sure you keep the copy of each Release form that has been provided.

29. I have not received my Release packet from my State Official(s), but I think I may be eligible.
The Release packet from your State Official(s) is due to be mailed to eligible borrowers on August 15, 2003. If you are calling before August 30, 2003, please note that your Release packet may still be on its way to you. Please call back after August 30, 2003 if you still have not received a packet.

30. When will I receive my payment?
Remember, if you want to receive payment, you must mail your signed Release form by October 14, 2003. Because this Settlement involves hundreds of thousands of borrowers across the country, it will take some time for the Settlement Administrator to process all Release forms. If everything goes as planned, we anticipate that payments will be mailed by the end of December 2003.

31. Will my information be kept confidential?
Yes, the Settlement Administrator will protect the privacy of all information provided to us by you or Household or Beneficial. This information will be used only to administer this Settlement.

32. What if my loan is not a real estate loan? Can I still be included in this Settlement?
The Settlement only covers real estate secured loans (i.e. mortgage loans or home equity loans) from a Household or Beneficial retail-lending branch that were entered into between January 1, 1999 and September 30, 2002. This includes loans that were opened during this time period regardless of whether or not the loan is currently open or closed.

33. I have a real estate loan that I opened on (any date prior to or after the date covered by the Settlement agreement). Am I included in this Settlement?
No, the Settlement only covers real estate secured loans (i.e. mortgage loans or home equity loans) from a Household or Beneficial retail-lending branch that were entered into between January 1, 1999 and September 30, 2002. This includes loans that were opened during this time period regardless of whether or not the loan is currently open or closed.

34. Can I take the signed Release form to my Household (or Beneficial) Branch Office or State Official’s Office?
No, the signed Release form must be returned to the Settlement Administrator at: 

Household-Beneficial Settlement Administrator
 PO Box 3775
 Portland, Oregon 97208-3775

35. Can I fax my Release form to my Household (or Beneficial) Branch Office or State Official’s Office?
No, the Settlement Administrator must receive an original signature; therefore you have to return the form by mail. The original and signed Release form must be returned to the Settlement Administrator at:

 Household-Beneficial Settlement Administrator
 PO Box 3775 
Portland, Oregon 97208-3775

36. I have already paid off my Household (or Beneficial) real estate secured loan. Am I still included in this Settlement?
Yes, customers whose loans have already been paid off are eligible to participate in the Settlement provided that the loans were real estate secured loans (i.e. mortgage loans or home equity loans) from a Household or Beneficial retail-lending branch that were entered into between January 1, 1999 and September 30, 2002. This includes loans that were opened during this time period regardless of whether or not the loan is currently open or closed.

37. My real estate secured loan is open and I’m still making payments to Household (or Beneficial). Am I still included in this Settlement?
Yes, customers whose loans are still open may be eligible to participate in the Settlement provided that the loans were real estate secured loans (i.e. mortgage loans or home equity loans) received from Household or Beneficial that were entered into between January 1, 1999 through September 30, 2002. This includes loans that were opened during this time period regardless of whether or not the loan is currently open or closed.

38. If I sign this Release from, does this mean that I don’t have to continue to make payments on my loan?
No, this Settlement does not affect the status of your loan or release you from any payment obligation for any open loan with Household or Beneficial. You must continue to make your loan payments in accordance with the terms of the loan agreement.

39. I want to payoff my Household (or Beneficial) loan. How can I find out what my payoff balance is?
To obtain a payoff statement from Household (or Beneficial) you may contact Household’s (or Beneficial’s) Customer Service Department at www.householdfinance.com or www.beneficial.com.

40. I have other questions regarding my Household (or Beneficial) loan. Who can I contact?
You may contact Household’s (or Beneficial’s) Customer Service Department at www.householdfinance.com or Beneficial’s website at www.beneficial.com.

41. What if my home is in foreclosure or has gone through foreclosure?
If you receive a Release form, you are eligible to receive a payment under the Settlement. However, participating in the Settlement and receiving a payment will NOT stop or undo a foreclosure. If you choose to participate in the Settlement, you must sign and return the Release form. In doing so, you give up various legal rights (listed on the Release form), but you do not give up your right to raise any rights and defenses in a foreclosure action. You are advised to contact a private attorney about your situation.

42. Do I have to pay taxes on the settlement payment I will be receiving?
Some consumers may receive a 1099 form with their settlement payment. However, whether any payment that you receive under this settlement is taxable will depend on several factors. Because of this, we are not able to give any individual tax advice. If you have tax questions, you should contact a local tax preparer or advisor.

43. How do I notify the Administrator that my mailing address has changed so that I am certain to receive my check?
You will want to contact the Settlement Fund Administrator at 1-888-780-2156 or on the web at www.household-beneficial-settlement.com, or by mail at Household settlement administrator, P.O. Box 3775, Portland, OR 97208-3775 you may email the administrator at info@household-beneficial-settlement.com. When contacting the administrator please give your full name, street address and zip code, and the tracking number from the release form if you have it.

44. If I accept the restitution payment can I still file a law suit against Household/Beneficial or join a class action lawsuit if I feel my damages were more than the amount I receive?
No, in order to receive payment under the restitution plan you are required to sign a release stating that you are waiving your rights to pursue further legal action against Household/Beneficial for the abuses identified under the settlement. You will still be able to assert any claim or defense against Household/Beneficial with respect to foreclosure actions.

45. Am I entitled to receive payment under the restitution plan if I assumed the loan from someone else?
If you are uncertain of your eligibility to receive payment you should contact the Settlement Fund Administrator at 1-888-780-2156 or on the web at www.household-beneficial-settlement.com, or by mail at Household settlement administrator, P.O. Box 3775, Portland, OR 97208-3775. Or you may email the administrator at info@household-beneficial-settlement.com. When contacting the administrator please give your full name, street address and zip code, and the tracking number from the release form if you have it.

46. Who must sign the release if my spouse and I are both on the loan documents, but we are no longer married?
All borrowers listed at the top of the Release form must sign the Release in order to receive payment.

If you have made every effort to obtain the co-borrower’s signature, you can sign and send in the release form with a letter attached explaining the circumstances as to why the co-borrower signature cannot be completed. An appeals process is set up to deal with these situations and make a decision.

47. I am refinancing or selling my home and the payoff from Household/Beneficial contains a prepayment penalty. Do I have to pay the prepayment penalty?
Household has agreed to reduce the term of all prepayment penalties to two years from the date of the mortgage. If you refinance or sell your home prior to the two year period you can be charged a prepayment penalty. If you sell or refinance your home after the two-year period, you should not be charged a prepayment penalty.

48. I modified my loan with Household/Beneficial to lower the interest rate. Could this affect the amount of money I receive under the settlement?
Possibly, because the current interest rate you are paying was used to determine the points allocated for a high interest rate.

49. I received a foreclosure notice from Household/Beneficial, will the settlement stop the foreclosure action?
No, the settlement does not address defaults and the settlement will have no effect upon the pending foreclosure. If you believe the foreclosure is not justified, seek legal counsel. However, the foreclosure will not effect the amount of money you are entitled to receive under the settlement. You will be able to affirmatively or defensively assert any claim or defense that you have with respect to your loan, even if you sign the release and accept payment under the settlement.

IF YOU CONTINUE TO HAVE QUESTIONS REGARDING THE SETTLEMENT PLEASE CONTACT THE SETTLEMENT ADMINISTRATOR AT 1-888-780-2156 or on the web at www.household-beneficial-settlement.com. Or you may email the administrator at info@household-beneficial-settlement.com. When contacting the administrator please give your full name, street address and zip code, and the tracking number from the release form if you have it.