Mortgage Giant PHH Reaches $45 Million Settlement for Improper Servicing and Foreclosure Practices
By Elizabeth Stewart @ Real Estate Daily
January 5, 2018

PHH Corporation is facing new allegations of mortgage servicing violations and improper foreclosure activity that spanned multiple years. The mortgage giant reached a $45 million settlement with 49 state attorneys general as well as the Multi-State Mortgage Committee (MCC).

Key Takeaways

  • PHH Corporation participated in improper mortgage servicing and foreclosure practices between 2009 and 2012
  • The mortgage giant reached a $45 million settlement with 49 different state attorneys general
  • About $30.4 million will be paid out to affected borrowers
  • The settlement imposes strict servicing standards and audit reports
  • PHH paid out $74 million last year in a separate case of underwriting violations

Brief

One of the nation’s largest non-bank lenders, PHH Corporation, just reached another huge settlement with the attorneys general of almost every state. The lender agreed to pay $45 million for improper mortgage servicing and foreclosure practices that spanned multiple years.

The settlement also imposes strict servicing restrictions and requires PHH to conduct periodic audits and submit the results to a committee of states.

“Homeowners suffered as a result of PHH’s improper loan servicing,” North Carolina Attorney General Josh Stein said. “These new servicing standards will ensure that PHH doesn’t mistreat future mortgage customers, and the financial relief will help some of the borrowers who were harmed as a result of the company’s actions.”

The settlement includes $30.4 million in payments to affected borrowers and almost $15 million in payments to state attorneys general and mortgage regulators. Borrowers who lost their home from PHH foreclosures between 2009 and 2012 will qualify for a minimum payment of $840. Borrowers who face PHH foreclosures, but didn’t lose their homes, qualify for a minimum payment of $285.

In the end, PHH refused to admit liability: “the servicing standards that we are required to adopt under the terms of the settlement are largely PHH’s servicing standards today,” the lender said in a statement.