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Attorney General Announces Settlement with PHH Mortgage Company for Improperly-Serviced Mortgage Loans

Attorney General Peter F. Kilmartin, 48 other state attorneys general, the District of Columbia, and more than 45 state mortgage regulators have 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.

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 284 Rhode Island borrowers are eligible for a payment. A settlement administrator will contact eligible payment recipients at a later date.

"Although the housing crisis is behind us, we continue to go after those mortgage service providers who failed to properly service mortgages that exasperated the financial situation of many homeowners," said Attorney General Kilmartin. "This agreement, like similar agreements announced in the past with mortgage service providers, requires new servicing standards to help ensure that PHH doesn't repeat conduct that hurt homeowners."

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