WaMu Mortgage Loan Class Action Settlement Gets Final OK

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

A California federal judge has granted final approval to a $10 million class action settlement between Washington Mutual Mortgage Securities Corp., WaMu Asset Acceptance Corp. and a Class of plaintiffs who alleged they were duped into buying unfavorable mortgage loans.

The WaMu mortgage loan class action lawsuit, which was initially filed in 2010, alleged that the Option ARM Loan documents provided by the defendants failed to make complete and accurate disclosures. Specifically, the plaintiffs alleged the Option ARM Loan documents 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.

In 2012, U.S. District Judge Josephine L. Staton granted the plaintiffs’ motion for Class certification, though she amended the Class definition when she preliminarily approved the deal. Class Members of the WaMu class action lawsuit include individuals who obtained an Option ARM Loan between Jan. 16, 2004 and Dec. 2, 2014 that was acquired by WaMu Asset Acceptance Corp. or Washington Mutual Mortgage Securities Corp., that was secured by real property in California, and was serviced by Washington Mutual Bank.

On Monday, Judge Staton gave final approval to the WaMu class action settlement. She had previously rejected the deal in 2013, finding the Class definition was too broad. Judge Staton preliminarily approved the class action settlement in November 2014.

Under the terms of the WaMu mortgage loan settlement, eligible Class Members will receive a payment of between $239 and $716, depending on the original loan balance and the length of time the loan was owned by the defendants. Class Members were not required to submit a Claim Form to qualify for benefits from the WaMu class action settlement. If they qualify, they will automatically receive a payment.

Notice of the WaMu class action settlement was reportedly mailed to 16,573 Class Members. In her order granting final approval to the WaMu mortgage loan class action settlement, Judge Staton noted that no objections were filed and only nine Class Members chose to exclude themselves from the class action settlement.

Although experts determined the Class Members’ total potential recovery was around $21 million, Judge Staton found that the $10 million class action settlement amount was fair and that the plaintiffs would have likely faced difficulty against the WaMu defendants.

“The settlement amount represents a positive result for the class,” Judge Staton wrote in her order approving the class action settlement. “Further, the settlement includes a fair, reasonable, and adequate scheme for distributing payments to class members.”

The plaintiffs are represented by Jeffrey K. Berns and Lee A. Weiss of Berns Weiss LLP, J. Mark Moore of Moore & Leviant and Mark R. Cuker of Williams Cuker Berezofsky LLC.

The WaMu Mortgage Loan Class Action Lawsuit is Timothy R. Peel, et al. v. BrooksAmerica Mortgage Corp., et al., Case No. 8:11-cv-00079-JLS, in the U.S. District Court for the Central District of California.