Case settles allegations of past improper mortgage servicing conduct
(DES MOINES, Iowa) Attorney General Tom Miller, along with attorneys general from 48 states plus the District of Columbia, and more than 40 state mortgage regulators, have reached a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation.
The settlement, through a complaint and proposed consent judgment filed in U.S. District Court in the District of Columbia, resolves allegations that PHH, the nation’s ninth largest non-bank residential mortgage originator and servicer, improperly serviced mortgage loans from January 1, 2009 through December 31, 2012.
The agreement requires PHH to follow comprehensive mortgage servicing standards, conduct audits, and provide audit results to a committee of states.
“This settlement holds PHH accountable for harms to homeowners in Iowa and across the country because of the company’s previous improper loan servicing practices,” Miller said. “We continue to review this type of conduct because of its profound impact,” Miller added. “This agreement requires PHH to adopt servicing standards to help prevent improper mortgage servicing, and to provide financial relief to aggrieved homeowners.”
The $45 million settlement includes $30.4 million in payments to borrowers.
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 at least $285.
Approximately 739 Iowa borrowers are eligible for a payment, including 363 who lost their property and 376 borrowers whose foreclosures had not been finalized.
A settlement administrator will contact eligible recipients later this year.
The settlement also includes payments to the state attorneys general who helped lead the investigation and negotiations, and state mortgage regulators.
The agreement does not release PHH from liability for any conduct that may have occurred since 2013.