Forty-nine states and the District of Columbia reached a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation. The settlement resolves allegations that PHH, the nation’s ninth largest non-bank residential mortgage servicer, improperly serviced mortgage loans from January 1, 2009 through December 31, 2012. The settlement does not release PHH from liability for conduct that occurred beginning in 2013. The agreement also requires PHH to adhere to comprehensive mortgage servicing standards, conduct audits, and provide audit results to a committee of states.
“The foreclosure crisis continues to devastate communities across New York. We have zero tolerance for the types of practices that helped create the crisis – and will hold mortgage companies to account,” said New York Attorney General Schneiderman. “This settlement requires new mortgage servicing standards and ensures financial relief for homeowners harmed by PHH’s practices.”
In a statement, PHH said that it agreed to the settlement in order to move beyond “legacy” issues, but notes that it did not admit liability. “We have agreed to resolve concerns raised by the MMC arising from its servicing examination conducted in 2010 and believe that settling this matter is in the best interest of PHH and its constituents,” the company said in a statement. “Our decision to resolve this legacy matter under the terms of the settlement agreement and consent orders is not an admission of liability or that we violated any applicable laws, regulations or rules governing the conduct and operation of our servicing business during the relevant time frame,” the company continued.
The $45 million total PHH settlement includes the $30.4 million in payments to borrowers, $1 million for claims administration, an additional $5 million to the lead states who headed up the investigation and negotiations, and a separate $8.8 million payment to state mortgage regulators. Borrowers who were subjected to PHH foreclosures during the eligible period may qualify for a minimum $840 payment.
* * *If you would like more information or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.