Household International Facts

• Nationally, Household International has extended $100 billion in loans to 50 million customers through two subsidiaries: Beneficial and HFC.
  
  
• Washington has 45 Household Finance offices and 36 Beneficial offices.
  
  
• About 11,000 Washington consumers held Household International real estate secured loans during the period covered under the settlement (January 1, 1999 to September 30, 2002).

Settlement Facts

ü Restitution -- $484 million for consumers if all 50 states and the District of Columbia participate in the settlement. Each state's share depends on the value of loans held by that state's consumers. Washington consumers will receive an estimated $20.6 million.

ü Prepayment penalties -- Prepayment penalties on current or future loans will expire 24 months after a loan's creation.

ü Costs - Household will reimburse states for their investigation and administration costs.

Significant Injunctions

• Loan Fees. For the next three years, Household will not charge more than five percent of the total loan amount to establish a loan.
  
  
• Rate and Point Option Disclosures. Household will clearly disclose a loan's interest rate and will tell consumers how much must be paid in advance to lower the rate.
  
  
• Good Faith Estimates. All fees contained in a Good Faith Estimate must be reasonably close to the amount paid at closing. Actual fees should not differ from the estimate by more than 10 percent.
  
  
• Secured Second Mortgages. Household will not make a second loan secured by the same property within 90 days of making the first loan if the loan is a refinance of the property.
  
  
• Balloon payments. Household will disclose if a "balloon payment" is needed to fully pay off a loan. Household will also disclose the amount of that payment.
  
  
• Independent Closer. Household will use "independent closers" to complete the loan process. An independent closer may be an employee, but must not report to sales management nor be paid based on loan production.
  
  
• Prepayment penalty disclosures. Household will disclose whether a borrower must pay a penalty for paying a loan off early. Prepayment penalties will not apply to loans older than 24 months.
  
  
• Net Tangible Benefit. No Household loan will be offered to a borrower unless the borrower benefits from the loan.
  
  
• Repeat Refinancing. Household shall not charge fees on any loan refinance within 12 months of the original loan.
  
  
• Insurance. Household will not require consumers to buy credit insurance, which is intended to pay off a loan if they are unable to make payments.
  
  
• Best rate available. Household must provide borrowers with the lowest available rate for any loan a consumer applies and is eligible for.