CHICAGO (AP) -- Household International, one of the nation's biggest lenders to people with bad credit, said Friday it will pay up to $484 million to settle claims it duped tens of thousands of mostly poor home buyers across the country with hidden and unnecessary costs.
Iowa Attorney General Tom Miller and other officials said it was the biggest settlement ever in a predatory lending case.
Household did not admit to any wrongdoing, but apologized and agreed to new lending practices and better monitoring of real estate loans.
Officials from 19 states and Washington, D.C., had accused Household of misrepresenting loan terms and keeping cost information from home buyers. They said many borrowers lost their homes or came close to losing them because their monthly payments were higher than expected.
"Owning a home to raise your family in is at the core of the American dream," Illinois Attorney General Jim Ryan said. "But because of the alleged deceptive practices in this case, many consumers found that dream turning into a financial nightmare."
The settlement money will go into a restitution fund for borrowers. The amount in the fund could range from $387.5 million to $484 million, depending on how many states participate.
About $5.5 million of the settlement will go to Minnesota customers.
Consumer advocates have long criticized Household's practices.
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