NOTICE OF PENDENCY OF CLASS ACTION, PROPOSED SETTLEMENT AND FINAL APPROVAL HEARING

Transcription

1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION GREGORY M. JORDAN, ELI GOLDHABER and JOSEPHINA GOLDHABER individually and on behalf of all others similarly situated, CASE NO. C SI CLASS ACTION v. Plaintiffs, [Assigned to Hon. Susan Illston] PAUL FINANCIAL, LLC, LUMINENT Class Notice Date: July 12, 2013 MORTGAGE CAPITAL, INC., HSBC BANK USA, N.A., AS TRUSTEE OF Objection Deadline: September 10, 2013 LUMINENT MORTGAGE TRUST , RBS FINANCIAL PRODUCTS INC., and Opt-Out Deadline: August 26, 2013 DOES 2 through 10 inclusive, Defendants. Final Approval Hearing: November 15, 2013 NOTICE OF PENDENCY OF CLASS ACTION, PROPOSED SETTLEMENT AND FINAL APPROVAL HEARING PLEASE READ THIS NOTICE CAREFULLY. THIS IS NOT A LAWSUIT AGAINST YOU. YOU MAY BENEFIT FROM READING THIS NOTICE AND YOUR RIGHTS MAY BE AFFECTED BY THE LAWSUIT AND THIS STIPULATION The Class THIS NOTICE IS SENT TO YOU BECAUSE YOU ARE A MEMBER OF THE RBS SUBCLASS AS DEFINED BELOW: All individuals who within the four-year period preceding the filing of Plaintiffs original complaint through the date that notice is mailed to the Class (the Class Period ), obtained an Option ARM loan from Paul Financial, LLC that either (a) was secured by real property located in the State of California, or (b) was secured by real property located outside the State of California where the loan was approved in or disseminated from California, which loan had the following characteristics: (i) the yearly numerical interest rate listed on page one of the Note is 3.0% or less; (ii) in the section entitled Interest, the Promissory Note states that this rate may instead of will or shall change, (e.g., The interest rate I will pay may change ); (iii) the yearly numerical interest rate listed on page one of the Note was only effective through the due date for the first monthly payment and then adjusted to a rate which is the sum of an index and margin; and (iv) the Note does not contain any statement that paying the amount listed as the initial monthly payment(s), will definitely result in negative amortization or deferred interest. Excluded from the Class are Defendants employees, officers, directors, agents, representatives, and their family members, as well as the Court and its officers, employees, and relatives.

2 The RBS Subclass All members of the Class whose Option ARM loans were sold or otherwise assigned by Paul Financial, LLC to RBS Financial Products Inc. I. WHY DID YOU GET THIS NOTICE? This Notice is given pursuant to an order of the United States District Court for the Northern District of California (the Court ). This Notice informs you that there is a pending settlement of a class action lawsuit that may affect you. The lawsuit is entitled Jordan, et al. v. Paul Financial, LLC, et al., Case No. C SI (the Action ) filed in the United States District Court for the Northern District of California. This Notice provides notice to you of the terms of the proposed settlement of the Class Action with defendant RBS Financial Products Inc. ( RBS ), so that if the partial settlement is approved by the Court, it can be implemented and a cash payment can be made to you in accordance with the procedures set forth herein. II. WHAT IS THE CLASS ACTION ABOUT? The Class Action was brought on behalf of a class of borrowers who received an Option ARM loan through Paul Financial, LLC ( Paul Financial ) from August 30, 2003 through the date of this Notice and a Subclass of borrowers, whose loans were acquired from Paul Financial by RBS. The operative Fourth Amended Complaint alleges causes of action for fraudulent omissions, and unfair and fraudulent business practices in violation of California's Unfair Competition Law ( UCL ), Bus. & Prof Code 17200, et seq. RBS has and continues to vigorously dispute the individual and class claims alleged in the Action, and raised material defenses thereto in an answer filed on October 26, After extensive good faith negotiations, the Class Representatives and RBS (the Parties ) have reached a proposed settlement of the Action (the Settlement ), which Class Representatives (including the attorneys acting on behalf of the RBS Subclass ( Class Counsel )) and RBS believe is fair and reasonable under the circumstances. The proposed Settlement between the Parties is a compromise of disputed claims. The Parties have negotiated the Settlement in order to avoid further costs, expenses, and uncertainties of litigation. RBS has and continues to deny the allegations of the Complaint, and denies that the Class Representatives have been harmed by any act or omission of RBS. But the Parties agree that it is in their best interests to compromise the claims raised by the Fourth Amended Complaint and to end the litigation due to their desire to avoid the expense, delay and risks of continued litigation, including motion practice and trial, and they desire to compromise the claims of the RBS Subclass against RBS. Defendant Paul Financial is not a party to this Settlement Agreement (as defined in Section III below), and remains a defendant in the Action. This Settlement Agreement is not intended to, and does not, release any claims against Paul Financial. III. WHAT IS THE STATUS OF THE ACTION? On August 30, 2007, the initial complaint was filed against Paul Financial in the United States District Court for the Northern District of California. The complaint in the Action was subsequently amended multiple times to add Eli Goldhaber and Josephina Goldhaber ( Class Representatives ) as plaintiffs and add Luminent Mortgage Capital, Inc., HSBC Bank USA, N.A., as Trustee of Luminent Mortgage Trust , and RBS as defendants. 2

3 The operative complaint is the Fourth Amended Complaint, filed on or about October 7, 2009, which alleges three causes of action: (a) violations of the Truth in Lending Act ( TILA ), 15 U.S.C. 1601, et seq.; (b) fraudulent omissions; and (c) unlawful, unfair, and fraudulent business practices in violation of California's Unfair Competition Law ( UCL ), Bus. & Prof Code 17200, et seq. (Dkt. No. 237) on behalf of the Class Representatives and a class of [a]ll individuals who within the four-year period preceding the filing of Plaintiffs original complaint through the date that notice is mailed to potential Class Members, obtained a Paul Financial, LLC Option ARM loan on [certain loan forms] on their home located in the State of California or on their home located outside the State of California where the loan was approved in or disseminated from California. On September 30, 2010, the Court granted RBS s motion to dismiss the Fourth Amended Complaint in part, dismissing plaintiffs TILA claims as time barred, and dismissing the unlawful prong of plaintiffs UCL claim. On July 27, 2011, the Court ordered the dismissal of defendants HSBC Bank USA, N.A. and the Luminent Mortgage Trust with prejudice. The Court granted plaintiffs motion for class certification on August 23, 2012, and certified the Class and RBS Subclass, as defined above, on September 26, After extensive negotiations and mediation, in February 2013 the Parties reached an agreement in principal to settle the Action against RBS. On May 1, 2013, the Parties executed an Agreement and Stipulation of Settlement of Class Action ( Settlement Agreement ) memorializing the terms and conditions of the Settlement of the Action with RBS, subject to approval by the Court. The Parties filed a Motion for Preliminary Approval of the Settlement on May 2, 2013 (the Motion ). The Court held a preliminary approval hearing on the Motion on June 14, 2013, and on June 14, 2013 it entered an order preliminarily approving the Settlement (the Preliminary Approval Order ), which, among other things, provides for the appointment of Berdon Claims Administration LLC as Settlement Administrator. The Preliminary Approval Order also ordered that this Notice be sent to all RBS Subclass Members. IV. WHO IS IN THE RBS SUBCLASS? The Court has defined the Class and RBS Subclass as follows: The Class All individuals who within the four-year period preceding the filing of Plaintiffs original complaint through the date that notice is mailed to the Class (the Class Period ), obtained an Option ARM loan from Paul Financial, LLC that either (a) was secured by real property located in the State of California, or (b) was secured by real property located outside the State of California where the loan was approved in or disseminated from California, which loan had the following characteristics: (i) the yearly numerical interest rate listed on page one of the Note is 3.0% or less; (ii) in the section entitled Interest, the Promissory Note states that this rate may instead of will or shall change, (e.g., The interest rate I will pay may change ); (iii) the yearly numerical interest rate listed on page one of the Note was only effective through the due date for the first monthly payment and then adjusted to a rate which is the sum of an index and margin; and (iv) the Note does not contain any statement that paying the amount listed as the initial monthly payment(s), will definitely result in negative amortization or deferred interest. Excluded from the Class are Defendants employees, officers, directors, agents, representatives, and their family members, as well as the Court and its officers, employees, and relatives. 3

4 The RBS Subclass All members of the Class whose Option ARM loans were sold or otherwise assigned by Paul Financial, LLC to RBS Financial Products Inc. All people who meet these criteria and do not exclude themselves from the proposed Settlement, in accordance with Section VII(B) below, will be deemed the RBS Subclass Members. V. WHAT ARE THE TERMS OF THE SETTLEMENT? The following description of the proposed Settlement is only a summary. In the event of any difference between this summary and the terms of the Settlement Agreement (a copy of which was attached to the Motion as Exhibit A), the terms of the Settlement Agreement shall control. You may obtain a copy of the complete Settlement Agreement from Class Counsel at the address set forth in Section VIII, below. The proposed Settlement described in this Notice is conditioned upon final approval by the Court. If the Court approves the Settlement at the Final Approval Hearing (as defined in Section VI below), then RBS will be dismissed from this Action with prejudice, and RBS Subclass Members who do not timely and validly exclude themselves from the Settlement will be bound by the terms of the Settlement Agreement as described below. The process for filing a request for exclusion from the Settlement is set forth below in Section VII(B) of this Notice. Subject to the terms of the Settlement Agreement, and the Court's final approval of the same, the Parties have agreed to a settlement as outlined below: A. Establishment of a Settlement Fund. RBS has agreed to deposit One Million Seven Hundred and Fifty Thousand Dollars ($1,750,000.00), reduced by certain ongoing expenses of this litigation (the Settlement Proceeds ) with the Settlement Administrator, as defined above, for the establishment of a Settlement Fund and in full and complete satisfaction of the claims made in the Action. RBS shall make initial payment of Twenty Thousand Dollars ($20,000.00) to the Settlement Administrator within ten (10) days of the Preliminary Approval Order, and the balance of the Settlement Proceeds to the Settlement Administrator within ten (10) business days after the Final Order Date. RBS s payment of the Settlement Proceeds will fulfill RBS s financial responsibility under the Settlement Agreement, and RBS will have no further obligation to pay any additional money in Settlement of the Action. All payments from RBS to the RBS Subclass Members, the Class Representatives, Class Counsel and/or the Settlement Administrator will be paid out of the Settlement Fund. B. Payment to RBS Subclass Members. The Settlement Administrator, on behalf of RBS, shall pay all RBS Subclass Members an equal portion of the Settlement Fund, after deducting from the Settlement Fund: (1) the payment to the Settlement Administrator of up to Twenty Thousand Dollars and No Cents ($20,000.00) and (2) Class Counsel s Attorneys Fees and Costs of up to 25% of the Settlement Fund. The Settlement Administrator may also pay an amount not to exceed Five Thousand Dollars and No Cents ($5,000.00) to each of the Class Representatives (the Class Representative Payment ) for the services they provided to the Class in connection with the prosecution of the Action, provided that such Class Representative Payments shall only be made upon approval by the Court. The Court shall have sole discretion as to whether to award a Class Representative Payment to any Class Representative and, if so, in what amount. 4

5 Payment of the RBS Subclass Members shares of the Settlement Fund shall be made by the Settlement Administrator s issuance of a check payable to each RBS Subclass Member (the Settlement Check ), or jointly to multiple RBS Subclass Members ( Co-RBS Subclass Members ) if the loan was obtained by more than one borrower. Only one Settlement Check will be issued per loan. Neither RBS nor the Settlement Administrator shall have liability to any person arising from any claim regarding the division of any payment made pursuant to the Settlement Agreement among Co-RBS Subclass Members or be responsible to any person for any disputes over the proper recipient of any payment made pursuant to the Settlement Agreement. Settlement Checks will be issued and mailed to RBS Subclass Members within sixty (60) days after the Final Order Date (as defined in the Settlement Agreement). Settlement Checks shall be negotiable for a period of one hundred and twenty (120) days after issuance and thereafter shall be void ( Void Date ). In the event that a Settlement Check is not negotiated by the Void Date, the RBS Subclass Member shall forfeit his or her right to payment and will not be entitled to have a Settlement Check reissued or to any further distribution from, or to any further recourse against, RBS or the Settlement Administrator, nor will the Settlement Check be deemed to be abandoned property subject to escheatment, but the Settlement Agreement shall in all other respects be fully enforceable against the RBS Subclass Member. NOTHING IN THE SETTLEMENT RELIEVES ANY RBS SUBCLASS MEMBER FROM HIS OR HER OBLIGATIONS UNDER THE MORTGAGE LOAN THAT WAS OBTAINED THROUGH PAUL FINANCIAL AND THAT WAS SOLD OR ASSIGNED TO RBS. C. Payment to the Class Representatives. Subject to approval by the Court, the Class Representatives, Eli Goldhaber and Josephina Goldhaber, will each receive Five Thousand Dollars and No Cents ($5,000.00), in settlement of their individual and class claims and in recognition of their services as Class Representatives. D. Class Counsel s Attorneys Fees and Costs. Class Counsel will receive Class Counsel s Attorneys Fees and Costs, as defined in the Agreement, in an amount to be determined by the Court, but not to exceed 25% of the Settlement Fund. The amount of Class Counsel s Attorneys Fees and Costs, as approved by the Court, will be paid out of the Settlement Fund by the Settlement Administrator. Class Counsel agrees that it will not request or seek from RBS, the Class Representatives, or the RBS Subclass, any amounts in excess of the amount of Class Counsel s Attorneys Fees and Costs as approved by the Court. Class Counsel will file a motion requesting the Court s approval of reasonable compensation for their services and for costs and expenses relating to the prosecution of the claims of the Class Representatives and RBS Subclass Members against RBS in this action at least fourteen (14) days in advance of the deadline for Written Objections. You may object to the Class Counsel s Attorneys Fees and Costs by filing an objection within the time and in the manner specified below. E. Distribution of Remainder. Any check to a RBS Subclass Member that is returned to the Settlement Administrator with a forwarding address will be re-sent to the address provided and the Settlement Administrator s database will be updated with the current address information. If any check to a RBS Subclass Member is uncashed sixty (60) days after the date of the instrument, the Settlement Administrator shall send a reminder letter to that RBS Subclass Member. The total amount of all checks that are returned as undeliverable, with no forwarding address, or still 5

6 uncashed one hundred and twenty (120) days after the date of the issuance of the instrument shall become part of a cy pres fund to be distributed to the California Council on Economic Education, a 501(c)(3) charitable organization dedicated to providing economic and financial literacy education to K-12 teachers and students. F. Release. Under the Settlement Agreement, all RBS Subclass Members who do not timely and validly exclude themselves from the Settlement will be bound by the terms of the Settlement Agreement if the Settlement is approved. Additionally, upon final approval of the Settlement, the Class Representatives and the RBS Subclass Members will be bound by the Release provisions of the Settlement Agreement. The Settlement Agreement provides that: 1. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Class Representatives and RBS Subclass Members, their respective co-borrowers, spouses, or former spouses, who may have or have had an interest in the loan that is the subject of this Settlement Agreement, and the present, former and future respective heirs, executors, administrators, representatives, agents, attorneys, partners, successors, predecessors-in-interest, assigns, employees and insurers of the Class Representatives and the RBS Subclass Members (collectively, the Releasing Parties ), hereby release, and forever discharge RBS, and each of its present, former, and future direct and indirect parent companies, including but not limited to its shareholders, directors, officers, insurers, affiliates, subsidiaries, divisions, officers, employees, agents, attorneys, directors, shareholders, assignors, and predecessors-in-interest (collectively the Released Parties ) from any and all duties, claims, counterclaims, judgments, lawsuits, actions, causes of action, set-offs costs, losses, expenses, sums of money, debts, charges, damages, executions, promises, omissions, agreements, rights and any and all demands, obligations or liabilities, of whatever kind or character, direct or indirect, relating to, arising out of or asserted in this Action relating to the Option ARM loans that were sold or otherwise assigned by Paul Financial, LLC to RBS. This release shall apply whether arising under local, state, or federal law, whether by statute, contract, common law, or equity. The foregoing Release shall also apply to any and all claims of the Releasing Parties that would be barred by the doctrines of res judicata and collateral estoppel had the issues in this case been litigated by each RBS Subclass Member to a final judgment on the merits, and to any and all past, present, and future claims, administrative or otherwise, actions, causes of action, rights, or liabilities, known or unknown, based on or arising from the allegations that are contained in the Complaint, or that could have been asserted in the Complaint, against any of the Released Parties, provided, however, that nothing in this Settlement Agreement shall limit or curtail any RBS Subclass Member s rights with respect to any claims that he or she may have against the remaining defendant Paul Financial, LLC, which is not a related entity, predecessor or affiliate of RBS. 2. The Class Representatives, RBS Subclass Members, and the Releasing Parties intentionally and knowingly waive any and all provisions, rights, and benefits conferred by any law of the United States, any state or territory of the United States, or any law or principle of common law or equity that governs or limits a person s release of unknown claims. The Class Representatives, RBS Subclass Members, and the Releasing Parties understand and acknowledge that they may discover facts in addition to or different from those that are currently known or believed to be true with respect to the subject matter of the Released Claims but that it is their intention to fully, finally, and forever settle and release all of the Released Claims, known and unknown, suspected or unsuspected, without regard to the subsequent discovery or current existence of any such additional or different facts, and in furtherance of such intention, the release of these Released Claims shall remain in effect notwithstanding the discovery or existence of any such additional or different facts. The provisions of this paragraph include, without limitation, an express, knowing, and voluntary waiver, to the fullest extent permitted by law, by the Class Representatives and all RBS Subclass Members and Releasing Parties, of any and all rights or benefits conferred under Section 1542 of the California Civil Code, which provides that: 6

7 A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Class Representatives, RBS Subclass Members, and the Releasing Parties understand and acknowledge the significance of this waiver of Section 1542 of the California Civil Code. In addition, the Class Representatives and all RBS Subclass Members and Releasing Parties also expressly, knowingly, and voluntarily waive any and all provisions, rights, and benefits conferred by any law of the United States, any state or territory of the United States, and any law or principle of common law or equity, which is similar, comparable, or equivalent to Section 1542 of the California Civil Code. 3. Notwithstanding any of the provisions herein, no person, Party or entity other than the Released Parties is receiving any release or waiver of liability under this Agreement. 4. Further, it is understood and agreed by the Parties that the Class Representatives, on behalf of themselves and the RBS Subclass they represent, allege and seek damages and restitution that exceed the amount of the Settlement Fund. Further, the Class Representatives and the RBS Subclass contend that the Settlement Fund is substantially less than the amount sought for the alleged injuries that they claim to have suffered as a result of the alleged conduct at issue in the Complaint. As stated in Section II, RBS has and continues to deny the allegations of the Complaint, that the Class Representatives have been harmed by any act or omission of RBS, and any and all claims for damages. However, in order to resolve the disputes between the Class Representatives and RBS Subclass Members on the one hand, and RBS on the other hand, the Class Representatives and RBS Subclass Members have agreed to release the Released Parties (and the Released Parties alone) from the Released Claims in exchange for compensation for the purported injuries allegedly caused by RBS. VI. FINAL APPROVAL HEARING The hearing for final consideration and approval of the Settlement (i.e., the Final Approval Hearing ), including attorneys fees to Class Counsel, is scheduled to occur on November 15, 2013, at 9:00 a.m. in Courtroom 10, 19th Floor of the United States District Court for the Northern District of California at 450 Golden Gate Avenue, San Francisco, CA That hearing may be adjourned without further notice. If you wish to determine if the hearing has been adjourned, you may contact Class Counsel at the address set forth in Section VIII below. At the Final Approval Hearing, the Court will be available to hear any objections and arguments concerning the fairness of the proposed Settlement or Class Counsel s Attorneys Fees and Costs, including any objections and arguments by those RBS Subclass Members who comply with the provisions of the Stipulation as noted in Section VII(c), below. YOU DO NOT HAVE TO ATTEND THIS HEARING UNLESS YOU OBJECT TO THE SETTLEMENT AND WISH TO APPEAR IN PERSON. IT IS NOT NECESSARY TO APPEAR IN PERSON IN ORDER TO MAKE AN OBJECTION. If the Court approves the Settlement, distribution to the RBS Subclass Members will be completed within approximately three (3) months after the entry of an order finally approving the Settlement, unless an appeal is taken. If an appeal is taken, there will be a delay in any payment and there is the possibility that the Court may not approve the Settlement. If the Settlement is not approved, the Class Action will proceed as if no Settlement had been attempted, and there will be no payments provided at all. There can be no assurance that if the Settlement is not approved and the Class Action continues to proceed, the RBS Subclass would recover more than what is provided in the Settlement Agreement, or indeed, recover anything at all. 7

8 VII. WHAT ARE YOUR OPTIONS? A. Remain a Member of the RBS Subclass. If you are satisfied with the proposed Settlement including Class Counsel s Attorneys Fees and Costs, you need do nothing and you will remain a RBS Subclass Member. Pursuant to the terms of the Settlement Agreement and after the Court s final approval of the same, RBS Subclass Members shall receive a pro rata distribution of the Settlement Fund as set forth in Section V(B) above. B. Right of Exclusion. You have the right to exclude yourself ( opt out ) from the Settlement. If you choose not to be bound by this Settlement, do not wish to share in any of the benefits described herein, you may opt out of the RBS Subclass by submitting a Request for Exclusion to the Settlement Administrator, as follows: Paul Financial Option ARM Class Action Exclusions c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, NY Your Request for Exclusion must be postmarked no later than forty-five (45) days after the date of this Notice (i.e., it must be postmarked no later than August 26, 2013). A Request for Exclusion must: (a) be in writing; (b) state the RBS Subclass Member s current address, former address (if different from the address to which the Settlement Notice was addressed), and social security number; and (c) contain a signed statement that: I/we hereby request that I/we be excluded from the proposed settlement class in the Jordan v. Paul Financial litigation, case number C SI. A Request for Exclusion that does not include all of the foregoing information, that is sent to an address other than the one designated in this Notice, or that is not sent within the time specified, shall be invalid, and the person(s) sending such a Request shall be bound as a RBS Subclass Member, provided that the Settlement is finally approved. Only you can request exclusion. No one can request exclusion for another person, except in the case of disability, guardianship or conservatorship. All RBS Subclass Members who properly file a timely, written Request for Exclusion shall be excluded as RBS Subclass Members and shall have no rights under the Settlement Agreement. If the Settlement is finally approved by the Court at the Final Approval Hearing, any and all RBS Subclass Members who have not submitted a timely, written Request for Exclusion shall be forever barred from asserting a claim against the Released Parties. C. Right to Object. If you believe that the proposed Settlement is unfair or inadequate, believe that Class Counsel s Attorneys Fees and Costs should not be approved, you may submit an objection to the Court. However, RBS Subclass Members who opt out of the Settlement have no right to file or present any objection. If you wish to submit an objection rather than simply to exclude yourself from the Settlement, you must file a written objection to the Settlement ( Written Objection ) with the Clerk of the District Court, 450 Golden Gate Avenue, San Francisco, CA no later than sixty (60) days after the date of this Notice (i.e., Written Objections must be served on or before September 10, 2013), and send copies of your Written Objection to Class Counsel and RBS s Counsel on the same date to the addresses listed below in Sections VIII and IX. The Written Objection must contain: (a) a statement of your objection, including the specific grounds for the objection and any other reasons why you desire to be heard; (b) any legal support you wish to bring to the Court s attention; and (c) any evidence, documents or writing that you wish to introduce in support of the Written Objection. Your objection should reference the name of the case as Jordan v. Paul Financial, case number C SI. 8

9 You may appear at the Final Approval Hearing in person or through counsel at your own expense. If you desire to appear in person or through counsel at the Final Approval Hearing, your written objection must also include notice of your intention to so appear. The Final Approval Hearing will be the only opportunity for any RBS Subclass Member who objects to the proposed Settlement, the Settlement Agreement, the release of the Released Claims, the entry of an order directing payment from the Settlement Fund, or the entry of an order awarding Class Counsel s Attorneys Fees and Costs, to appear and be heard. VIII. WHO REPRESENTS THE CLASS? The law firms of Berns Weiss LLP, Smoger & Associates, Arbogast Bowen LLP, and Spiro Moore LLP represent the Class Representatives, the Class, and the RBS Subclass. All notices to Class Counsel as required or permitted to be given by law or by the terms of the Settlement Agreement shall be in writing and shall be sent by first class United States mail, postage prepaid, addressed as follows: Jeffrey K. Berns Lee A. Weiss BERNS WEISS LLP Ventura Blvd., Suite 140 Woodland Hills, CA IX. WHO REPRESENTS RBS? The following attorneys represent RBS in connection with this Settlement Agreement. All notices to Counsel for RBS as required or permitted to be given by law or by the terms of the Settlement Agreement shall be in writing and shall be sent by first class United States mail, postage prepaid, addressed as follows: Benjamin B. Klubes Michelle L. Rogers BUCKLEYSANDLER LLP th Street, NW, Suite 700 Washington, DC X. CORRECT ADDRESS If this notice was sent to you at an address that is not current, or if it was otherwise forwarded to you by the U.S. Postal Service, you should immediately contact the Settlement Administrator, stating the name of the case and your past and current address on any letter, fax or sent, as follows: Paul Financial Option ARM Class Action c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, NY Phone: Fax: Click Contact Us 9

10 XI. AVAILABILITY OF FILED PLEADINGS This description of the Class Action is general and does not cover all of the issues and proceedings thus far, and provides only a summary of the basic terms of the proposed Settlement. The precise terms and conditions of the proposed Settlement are contained in the Settlement Agreement on file with the Court. All papers filed in the Class Action, including the Settlement Agreement, are available for you to inspect and order copies at your expense at the office of the Clerk of the Northern District Court, 450 Golden Gate Avenue, San Francisco, CA Certain of these documents also are available online at XII. WHO CAN HELP YOU WITH ADDITIONAL INFORMATION? For any questions you have concerning this Notice, the Class Action, or the Class Claim, and all requests for more information, including a copy of the Settlement Agreement or the Motion, please contact the Settlement Administrator, as follows: Paul Financial Option ARM Class Action c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, NY Phone: Fax: Click Contact Us Please include the case name, case number, and your name and return address on any letter, fax, or that you send. While the Court has approved the sending of this Notice, it does not indicate, and is not intended to indicate, that the Court has any opinion as to the respective claims or defenses asserted by the parties in the Class Action. DO NOT TELEPHONE, SEND INQUIRIES, OR ADDRESS ANY QUESTIONS ABOUT THE CASE TO RBS FINANCIAL PRODUCTS INC., PAUL FINANCIAL, LLC, THE CLERK OF THE COURT, OR TO THE JUDGE CONCERNING THIS MATTER. Dated: July 12, 2013 By Order of the Court 10