Restitution for Ohio borrowers
8/12/2003Ohioans getting restitution from an Illinois lender specializing in mortgages to people with poor credit or with low to moderate incomes will be paid at least $200 and possibly $5,200 by year's end, state officials announced yesterday.
In all, 43,254 Ohioans who borrowed from Household International Inc. of Prospect Heights between January, 1999, and September, 2002, will divide $31.8 million. How much a consumer gets will depend on the amount borrowed and certain factors in the loan, according to the state.
Household International is accused of overcharging borrowers with fees and interest as well as misleading them about other loan terms, such as prepayment penalties and credit insurance. As part of the settlement, the company agreed to a series of reforms, such as improving loan disclosures.
When the multistate settlement was announced last October, more than 20,000 Ohioans were expected to divide $30 million. State officials reviewed loans and found more Ohioans were affected than first thought, and the total dollar amount was an estimate, said Dennis Ginty, a spokesman for the Ohio Department of Commerce.
“We felt that the abusive lending that we found applied to more than just the 20,000,” he said.
Household International, parent of the Household and Beneficial finance companies, agreed to pay up to $484 million to settle illegal lending allegations in various states, including Ohio and Michigan. About 10,700 Michigan residents are expected to share up to $14 million.
Affected Ohioans will soon get a postcard informing them of their eligibility; a settlement form should arrive next week in a separate mailing. Recipients have to complete those forms by Oct. 14 to participate in the settlement, and payment checks will be made by year's end.