Judge OKs $1 million class action settlement with mortgage broker

A federal judge has given final approval to a $1 million class action settlement involving a mortgage broker.

Nicole and Alexander Glen had sued Fairway Independent Mortgage Corp. in St. Charles County Circuit Court in 2007, and the defendant moved the case to federal court the following year. The plaintiffs alleged that Fairway promised customers it would disclose to them additional compensation it was getting from lenders it sent their loans to, but then failed to do so. The suit alleged the business received fees from lenders but didn’t tell customers, and that the action was a deceptive practice in violation of the state Merchandising Practices Act.

In court documents, Fairway denied that it broke any law or failed to make any required disclosures but said it was settling to avoid the risk and cost of continued litigation.

U.S. District Judge Rodney Sippel held a fairness hearing this morning in St. Louis, but no one filed objections or appeared to oppose the settlement. After hearing from the lawyers, the judge said from the bench that he approved the settlement and the request for attorneys’ fees. The formal order wasn’t yet on file.

Plaintiffs’ attorneys say the class includes about 800 people. Clayton lawyer David Butsch told the judge that class members who used Fairway for a regular home loan should receive $1,155 on average, while those who used the broker for refinancing should get an average payment of nearly $500.

The case is Glen v. Fairway Independent Mortgage Corp., 4:08-cv-730.