Agreement with 49 States, D.C., and 45 State Mortgage Regulators Holds PHH Accountable for Improper Mortgage Servicing Between 2009 and 2012; 1,600 New Yorkers Eligible for Payment.
New York, NY - January 3, 2017 - Attorney General Eric T. Schneiderman today announced that 49 states, the District of Columbia and 45 state mortgage regulators 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 agreement requires PHH to adhere to comprehensive mortgage servicing standards, conduct audits, and provide audit results to a committee of states. The settlement does not release PHH from liability for conduct that occurred beginning in 2013.
“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 Attorney General Schneiderman. “This settlement requires new mortgage servicing standards and ensures financial relief for homeowners harmed by PHH’s practices.”
The $45 million settlement includes $30.4 million in payments to borrowers, plus additional payments to states and mortgage regulators for costs and fees related to the investigation.
Borrowers who were subjected to PHH foreclosures during the eligible period will qualify for a minimum $840 payment, and borrowers who faced foreclosures that PHH initiated during the eligible period, but did not lose their home, will receive a minimum $285 payment. Approximately 1,600 New Yorkers are eligible for a payment. A settlement administrator will contact eligible payment recipients at a later date.
The case was handled Deputy Bureau Chief Laura J. Levine under the supervision of Bureau Chief Jane M. Azia in the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General of Economic Justice Manisha M. Sheth.