Sarah Mirando  |  November 25, 2013

Category: Closed Class Actions

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This settlement is closed!

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Bear Stearns Option Arm Class Action Settlement

Bear Stearns Residential Mortgage Corporation (BSRMC) has reached a class action lawsuit settlement over claims the company’s Option ARM Loan documents failed to make complete and accurate disclosures. If you have or had an Option Adjustable Rate Mortgage Loan that was purchased by EMC Mortgage Corporation between Aug. 28, 2003 and March 29, 2013, you may be able to receive an estimated payment of between $500 and $5,000 from a class action settlement.

The Bear Stearns settlement will resolve a class action lawsuit (Monaco v. Bear Stearns Residential Mortgage Corp.) that alleges the Option ARM Loan documents were misleading because they failed to disclose that, by making the minimum monthly loan payment at the beginning of the loan term, the principal balance of the loan would increase.

Bear Stearns denies the allegations and maintains that the Option ARM Loan documents accurately describe the minimum monthly payment and negative amortization. However, the company has agreed to settle the class action lawsuit and provide cash payments to Class Members.

Who’s Eligible

Class Members of the Bear Stearns Option ARM Loan settlement include individuals who obtained an Option ARM Loan secured by real property located in California between Aug. 28, 2003 and March 29, 2013, which was originated by BSRMC or one of 56 other Option ARM Loan originators (listed in the Class Notice) that was purchased by EMC on a flow basis.

To be eligible for payment under the class action settlement, the Option ARM Loan must have had the following characteristics:

 

  • The interest rate paragraph states a “yearly” interest rate that is less than the index plus the margin and that the interest rate “may” change.
  • The “initial monthly payment” is based upon the yearly interest rate.
  • The note does not contain any statement that after the first interest rate change date, paying the amount listed as the “initial monthly payment” will result in negative amortization or deferred interest.
Potential Award

The amount of your settlement check will depend on the original amount of your Option ARM Loan and the length of time payments were made on that loan. Class Members are expected to receive between $500 and $5,500 from the class action settlement.

Claim Form Deadline

12/16/2013

Case Name

The Bear Stearns Option ARM Class Action Lawsuit is Monaco v. Bear Stearns Residential Mortgage Corporation, et al., Case No. 2:09-cv-05438-SJO, in the U.S. District Court for the Central District of California.RS

Final Hearing

2/3/2014

UPDATE: A federal judge granted final approval to the Bear Stearns Option ARM Class Action Settlement at the Final Fairness Hearing.

Settlement Website

www.OptionARMClass.com

Claims Administrator

Monaco v. Bear Stearns Residential Mortgage Corp.
Settlement Administrator
P.O. Box 43154
Providence, RI 02940-3154
1-855-330-5905

Class Counsel

Jeffrey K. Berns
Lee A. Weiss
BERNS WEISS LLP

Defense Counsel

LeeAnn Pederson Pope
Victoria R. Collado
Andrew D. LeMar
BURKE WARREN MACKAY & SERRITELLA PC

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2 thoughts onBear Stearns Option ARM Class Action Lawsuit Settlement

  1. Yaslin Luna says:

    Is unbelievable how NO communication was issue to notify this action. What is weird about the whole contract is that the more you read into it the action were already indicated between the lines…..The take over started since day one you closed. I WANT MY HOME BACK!

  2. Lavon t Rogers says:

    Yes I have arm loan and I want my money back that is wrong.

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