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September 14, 1995


The opinion of the court was delivered by: EDUARDO C. ROBRENO


 SEPTEMBER 14, 1995

 Plaintiffs Michael and Erna Lake have filed this motion seeking the Court's approval of the settlement in this class action, final certification of the class, attorneys' fees, and class representative fees. Having preliminarily approved the certification of the class and the settlement, the Court is now called upon to issue final findings. For the reasons set forth below, the motion shall be granted.


 Plaintiffs Michael and Erna Lake brought this action on behalf of current and former customers of First Nationwide Bank ("First Nationwide" or "Bank"), a holder and servicer of residential mortgages. As part of its mortgage service agreement with homeowners, First Nationwide required its customers to deposit funds into an escrow account to pay for insurance premiums, property taxes, and other items as they became due. Plaintiffs contend that the amount required in the escrow accounts by First Nationwide has led to surpluses being carried in excess of the amount required by law and by First Nationwide's mortgage agreements, in violation of the standards set forth in § 10 of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C.A. § 2609(2) (West 1989). *fn1" Additionally, plaintiffs assert state law claims for breach of contract, misrepresentation, breach of fiduciary duty, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, Pa. Stat. Ann. tit. 73, §§ 201-1--201-9.2 (1993).

 The plaintiffs moved the Court to certify conditionally a class consisting of customers of First Nationwide who presently or formerly had their mortgages serviced by the Bank, and also asked the Court to grant preliminary approval to a class-wide settlement. As part of its obligations under the negotiated settlement, First Nationwide agreed to alter its method of operation so that a reduced surplus will be held in customer escrow accounts in the future. Moreover, First Nationwide agreed to refund to the class all funds that it currently holds in excess of the amount required by the settlement. *fn2"

 In addition, the settlement shall afford the plaintiffs retrospective relief in the form of a one-time monetary award meant to compensate the class for the lost use of their money. Class members who have a mortgage currently being serviced by First Nationwide will share an interest award totalling $ 156,771. Meanwhile, class members who held or are holding mortgages formerly serviced by First Nationwide will also share an interest award not exceeding $ 10,000. *fn3" In return for the refund, the interest award, and First Nationwide's agreement to change its future escrow requirements, the class agreed to release all claims against the Bank pertaining to its mortgage practices and procedures. The parties further agreed that attorneys' fees in an amount not exceeding $ 110,000 are to be awarded to plaintiffs' counsel, and that a $ 2,000 payment shall be made to Michael and Erna Lake for their duties as class representatives.

 A hearing was held to consider conditional certification of the class and preliminary approval of the settlement on February 1, 1994. After entertaining arguments from counsel on the issues, the Court conditionally certified the class, granted preliminary approval to the settlement and the requested fees, and issued findings to that effect. See Lake v. First Nationwide Bank, 156 F.R.D. 615 (E.D. Pa. 1994) [hereinafter Lake I ]. Notice was given to the class of the proposed settlement. Approximately eighty-seven individuals responded by objecting to the settlement or by asking to be excluded from the plaintiff class. Upon the conclusion of the notice and opt-out period, the plaintiffs filed a motion seeking final certification of the class and final approval of the settlement, counsel's fees, and the class representative fee to the plaintiffs. A hearing to consider these issues was held on November 29, 1994. Having received additional material and further briefing on the relevant issues, the Court now sets forth its conclusions.


 1. Certification of the Class

 This class action was conditionally certified for the purpose of concluding the settlement between the parties. The Third Circuit has declared that class actions created for the sole purpose of settlement are recognized under the general scheme of Federal Rule of Civil Procedure 23. See In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 792-97 (3d Cir.), petition for cert. filed, 116 S. Ct. 88, 133 L. Ed. 2d 45, 64 U.S.L.W. 3241 (U.S. June 28, 1995) (No. 94-2137). The Third Circuit has also directed district courts to "make findings because the legitimacy of settlement classes depends upon fidelity to the fundaments of Rule 23." Id. at 794. Since the Court has already made preliminary findings in this case, the issue is whether these findings should be made final.

 A plaintiff seeking class certification under Rule 23 must demonstrate that the action satisfies the four threshold requirements of paragraph (a), and that the action qualifies under one of the three subdivisions of subsection (b). Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 163, 94 S. Ct. 2140, 2145, 40 L. Ed. 2d 732 (1974). Paragraph (a) of Rule 23 specifies that:

One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

 Fed. R. Civ. P. 23(a). The plaintiffs also contend that the class action is qualified to proceed under Rule 23(b)(3). That section provides that a class action may be maintained if a court finds

that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.

 Fed. R. Civ. P. 23(b)(3). This Court earlier found the criteria of Rule 23(a) and 23(b)(3) to be fully satisfied and gave its conditional approval to the class. Lake I, 156 F.R.D. at 622-26.

 The parties allege that the facts subsequent to the Court's conditional certification have not changed, and the Court, after conducting a hearing, is not aware of any additional information which would alter its initial findings. Therefore, for the reasons given in the Court's memorandum opinion of July 29, 1994, see Lake I, 156 F.R.D. 615, the criteria of Rules 23(a) and 23(b)(3) are deemed satisfied and the class shall be granted final certification.

 2. Approval of Settlement

 The parties seek final court approval of their settlement now that the class has been afforded notice of the settlement's proposed terms and an opportunity to comment on them. Prior to granting final approval to the settlement, the Court must find it to be "fair, adequate, and reasonable." Walsh v. Great Atlantic & Pacific Tea Co., 726 F.2d 956, 965 (3d Cir. 1983). Significant weight should be attributed "to the belief of experienced counsel that settlement is in the best interest of the class." Austin v. Pennsylvania Dep't of Corrections, 876 F. Supp. 1437, 1472 (E.D. Pa. 1995). However, due to the risk that a collusive settlement agreement may be reached that fails to satisfy the class, a reviewing court must ascertain that the settlement was the product of "good faith, arms length negotiations" before granting its approval. Fisher Bros. v. Cambridge-Lee Indus., Inc., 630 F. Supp. 482, 487 (E.D. Pa. 1985).

 "In order for the determination that the settlement is fair, reasonable, and adequate 'to survive appellate review, the district court must show it has explored comprehensively all relevant factors.'" In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d at 805 (citing Malchman v. Davis, 706 F.2d 426, 434 (2d Cir. 1983)). In conducting this analysis, the Third Circuit has instructed district courts to inform their decisions by the factors outlined in the leading case of Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975):

(1) the complexity, expense and likely duration of the litigation;
(2) the reaction of the class to the settlement;
(3) the stage of the proceedings and the amount of ...

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