D.C. – Attorney General Karl A. Racine, 48 other state attorneys general, and over 45 state mortgage regulators have reached a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation (PHH). The settlement resolves allegations that the company harmed borrowers through multiple improper practices that resulted in premature and unauthorized foreclosure proceedings for thousands of homeowners, including approximately 25 District residents.
The attorneys general alleged that PHH 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 $45 million settlement includes $30.4 million in payments to borrowers, plus additional payments to state attorneys general who helped lead the investigation and negotiations, and a separate payment to state mortgage regulators.
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. A settlement administrator will contact eligible payment recipients at a later date.
A copy of the consent judgment between the District, participating states, and PHH is attached. A copy of the lawsuit that the judgment settles is also attached.