Deceptive Mortgage Lending Settlement Largest Obtained by
State Attorneys General in Consumer Protection Case

Columbia, S.C. - Attorney General Henry McMaster announced today that South Carolina consumers who had home loans with Household or Beneficial Finance could now claim their portion of the $5.2 million settlement.

Eligibility notices were sent this week to approximately 8,000 South Carolinians who obtained a mortgage loan directly from Household from January 1999 through September 2002.

Those wishing to participate must complete and return a simple claim and release form. Payments will be then be paid directly to the consumers by check before the end of the year.

The South Carolina settlement distribution plan provides for payments to all Household borrowers who were subject to specific unfair lending practices, including excessive loan points, prepayment penalties, and credit insurance “packing.” The size of the individual payment depends on the number of loans by a consumer and the amount of those loans.

Household mortgage loan customers who have questions about the settlement payment procedures can contact a toll-free number, 1-888-780-2156 or visit the settlement website address is: www.household-beneficial-settlement.com

“We were pleased to negotiate a strong settlement with Household, but we are even more pleased to see money flowing back to South Carolina consumers,” said McMaster.

The consumer payment program stems from the landmark settlement between Household International and the attorneys general of all 50 states and the District of Columbia. Household International, through its subsidiaries Household and Beneficial Finance, is one of the nation’s largest sub-prime mortgage lenders.

The settlement resolved an investigation by the states into allegations of unfair and deceptive mortgage lending practices by Household. The states alleged that Household had overcharged borrowers with fees and interest, and had misled borrowers about other loan terms such as prepayment penalties and credit insurance.

Under the settlement, which was finalized in December 2002, Household agreed to pay $484 million dollars to the States to be distributed to eligible Household borrowers. The monetary settlement was the largest ever obtained by state attorneys general in a consumer protection case.

As part of the settlement, Household also agreed to implement a series of reforms in its lending operations. Court injunctions in place in all 50 states restrict prepayment penalties on current and future home loans, prohibit loan “flipping,” limit up-front points and origination fees, and improve loan disclosures.

South Carolina’s restitution plan is a 50/50 split method for distribution of its portion of the settlement, with half of the settlement divided by the number of loans and the remaining half being pro-rationed based on the percentage of the loan amount by the borrower.

FREQUENTLY ASKED QUESTIONS

What types of mortgages are covered by this settlement?

For South Carolina borrowers, all real estate secured loans originated by Household’s retail branches from January 1, 1999, through September 30, 2002. Any South Carolina consumer who took out a home loan from Household or Beneficial during this time period is eligible for a settlement payment. If you are eligible to participate in the settlement, you should receive a notice and release form in the mail. The minimum amount of your settlement payment will be stated in the release form

How was the minimum payment amount on the eligibility form calculated?

The amounts were calculated on the restitution plan specific for each State. The restitution plans varied between the States. South Carolina’s restitution plan is a 50/50 split method for distribution of their portion of the settlement, with half of the settlement divided by the number of loans and the remaining half being pro-rationed based on the percentage of the loan amount by borrower. An eligible South Carolina consumer can participate in both the loan and borrower consumer restitutions. The exact amount of the payment will also depend on the number of loans and the amount of loans by a consumer and would also depend on the number of people requesting a refund.

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NOTE: Copies of the eligibility notification will be made available upon request.