AUSTIN – Attorney General Ken Paxton, 48 other state attorneys general and the District of Columbia reached a $45 million settlement with New Jersey-based PHH Mortgage Corp.
The settlement resolves allegations that PHH – the nation’s ninth largest non-bank residential mortgage originator and servicer – improperly serviced mortgage loans from Jan. 1, 2009 through Dec. 31, 2012. The agreement requires PHH to adhere to certain mortgage servicing standards, conduct audits, and provide audit results to a committee of states, but does not release PHH from liability for conduct that occurred beginning in 2013.
“This settlement sets up strict requirements for servicing standards to help ensure that PHH can no longer improperly service mortgages,” Paxton said. “Texas is dedicated to holding accountable any person or business that harms homeowners so egregiously.”
The settlement includes $30.4 million in payments to borrowers, plus lawyers’ fees 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 payment of $840, and borrowers who faced foreclosures that PHH initiated, but did not lose their homes, will receive a minimum $285 payment. A settlement administrator will contact eligible payment recipients based on PHH company records.