NovaStar Pays $5.1M To Settle Class Action

Law360, New York (July 2, 2007, 12:00 AM EDT) -- NovaStar Mortgage Inc. has agreed to pay $5.1 million to settle a class action alleging that the subprime lender concealed yield spread premiums, or extra payments to brokers, from 1,600 borrowers.

On Thursday, Judge Robert J. Bryan of the U.S. District Court for the Western District of Washington gave preliminary approval to the settlement, which is made up of a $3.3 million pay out to NovaStar borrowers and $1.8 million in attorneys’ fees. The court will offer final approval of the deal after a fairness hearing,...
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