PHH Corporation will pay $45 million to settle a nationwide probe over alleged mortgage servicing violations. The company reached the settlement with 49 state attorneys general and the Multi-State Mortgage Committee (MCC), a committee of state regulators.
The states claimed that for years, PHH – one of the country’s largest non-bank residential mortgage companies – engaged in improper servicing and foreclosure activities. The settlement will require PHH to follow comprehensive servicing standards, conduct audits, and provide the results of those audits to a committee of states.
“This settlement sets up strict requirements for servicing standards to help ensure that PHH can no longer improperly service mortgages,” Texas Attorney General Ken Paxton said.
The $45 million settlement payment includes $30.4 million in payments to borrowers. The settlement also includes payments to state attorneys general and state mortgage regulators.
“Homeowners suffered as a result of PHH’s improper loan servicing,” North Carolina Attorney General Josh Stein said. “These new servicing standards will ensure that PHH doesn’t mistreat future mortgage customers, and the financial relief will help some of the borrowers who were harmed as a result of the company’s actions.”
According to Stein, borrowers who were subjected to PHH foreclosures during the eligible period between 2009 and 2012 will qualify for a minimum payment of $840. Borrowers who faced foreclosures initiated by the company during the period, but did not lose their homes, will receive at least $285.
PHH, for its part, did not admit liability in the settlement.
“In fact, the servicing standards that we are required to adopt under the terms of the settlement are largely PHH’s servicing standards today,” the company said Wednesday in a statement.