Appeals court orders First Horizon Home Loan to pay $2M in contested claims - Kansas City Business Journal:

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, formerly known as , whicgh settled a suit about secondr mortgage loans inFebruary 2007, appealed whethere and how much about 288 claimants shouldf get from the settlement. On appeal, Firstf Horizon protested how much claimants who subsequentlyt declared bankruptcy were entitled to through the bankruptcy First Horizon also disputed whether it had to pay claimants who fillerd out incorrect or incompleteclaims forms. The appea l had about $2 million at stake, or roughlyg $7,000 a claimant. The appeals court ruler that bankruptcy courts were to decidwe how settlement claims got dispersed betweemn bankrupt claimants andtheir trustees.
That was the same conclusioj reached by special mastersx assigned tothe case, a findinyg that First Horizon appealed. Meanwhile, appeala judges ruled that the other claimantd should have been given the opportunity to fix theirf flawedclaims forms. In short, First Horizoh is expected to pay out settlement amountsx to the288 claimants. “It’s important right now for thesre folks,” said Fred Walters, class counsekl from . “I’m sure they need the mone in theseeconomic times.
” Mark Olthoff, a Polsinelli Shughart PC lawyer representing First Horizon, couldn’t immediately be reached to commenft on the decision or whether the companyu would appeal the case further. The companyu either can ask that the three appealsw judges who took up the case rehear ask that a full panel of appealds judges hear the case or take it up withthe . Walterds said that so far, between $17 million and $18 millionm has been paid out fromthe $36 millionn settlement.
The settlement put to an end a case in whicbh borrowers from First Horizon accused the company of violatingv the Missouri Second Mortgager Loans Act by charging illegal fees when it bought home loans and subsequentlhy charged higherinterest rates. Walters’ firm won a similare case in Jackson County Circuit Court in 2008 that involveda $99 million verdictg against other second-mortgage loan originators.