Background

Named Plaintiffs Donna Moore, Frenchola Holden and Keith McMillon filed this lawsuit, Moore, et al. v. GMAC Mortgage, LLC et al., Civil Action No. 2:07-cv-04296-PD (E.D. Pa.), in the United States District Court for the Eastern District of Pennsylvania, naming GMAC Mortgage, LLC (“GMAC Mortgage”), GMAC Bank (now known, and herein referred to, as “Ally Bank”), and Cap Re of Vermont, LLC (“Cap Re”) as defendants (collectively, “Defendants”). The Action was filed as a proposed class action.

Named Plaintiffs obtained mortgage loans secured by residential real property, which required Private Mortgage Insurance (“PMI”) that was reinsured by Defendant Cap Re. Plaintiffs allege that Defendants entered into “captive reinsurance arrangements” for the purpose of receiving kickbacks, referral payments and unearned fee splits (disguised as “reinsurance” premiums) from private mortgage insurers to whom GMAC Mortgage referred borrowers, in violation of Sections 8(a) and (b) of RESPA, 12 U.S.C. §§ 2607(a) and (b). Plaintiffs allege that these captive reinsurance arrangements were created for the primary purpose of facilitating kickbacks and “naked” referral payments prohibited by RESPA and, secondarily, to guarantee a steady stream of business for the seven private mortgage insurance companies (collectively, the “MI Providers”) that provided practically the entire nation’s PMI during the relevant time period. Plaintiffs argue that Cap Re, the GMAC Mortgage-affiliated reinsurer, assumed no, or very little, real risk under the contracts and, therefore, did not provide real or commensurately priced reinsurance.

Defendants dispute the Named Plaintiffs’ contentions and assert that they entered into bona fide reinsurance agreements as evidenced by the reinsurer’s substantial payments on claims as well as projections of significant, further claim payments under the reinsurance contracts. The Court has made no determination as to the validity of the Named Plaintiffs’ claims or the Defendants’ defenses.

On April 29, 2014, the Court entered an Order preliminarily approving the Settlement Agreement, preliminarily certifying a class and appointing the Named Plaintiffs as class representatives for settlement purposes only, appointing Kessler Topaz Meltzer & Check, LLP as Lead Class Counsel and Bransom, Plutzik, Mahler Birkhaeuser, LLP, Berke, Berke & Berke, and Travis & Calhoun as Class Counsel (collectively, “Plaintiffs’ Counsel”), approving the form and manner of class notice, and setting a date for a Final Approval Hearing at 10:00 a.m. on September 17, 2014.

On September 19, 2014, the Court entered an Order approving Plaintiffs’ Unopposed Motion for Final Approval of Class Action Settlement, Certification of Settlement Class, Approval of Plan of Allocation, Appointment of Class Representatives and Appointment of Lead Class Counsel and Class Counsel (the “Final Approval Order”).

The initial distribution to eligible Class members took place on January 24, 2015.