Attorneys general have reached a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation. More than 2,000 Arizona families are expected to qualify for settlement payments.
Arizona participated in the settlement along with the attorneys general of Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.
The settlement resolves allegations that PHH, the nation’s ninth largest non-bank residential mortgage servicer, improperly serviced mortgage loans from 2009 to 2012. PHH allegedly charged unauthorized fees, failed to apply borrowers’ payments on time, threatened foreclosure on borrowers engaged in loss mitigation, and failed to keep proper foreclosure documentation.
The settlement includes approximately $30 million in payments to 52,000 affected borrowers nationwide. 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 at a later date.
The agreement, which was also joined by more than 40 state mortgage regulators, 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.