By Ramona du Houx
Attorney General Janet Mills, 48 other state attorneys general, the District of Columbia and over 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.
The harm sustained by some PPH customers includes payment of improper fees and charges, misapplication of payments, dual tracking activity, and loss of homes due to improper, unlawful, or undocumented foreclosures.
"This settlement holds PHH accountable for threatening to foreclose and foreclosing on Maine homeowners," said Attorney General Mills. "This agreement provides monetary relief to 293 Maine homeowners and requires the company to live up to new standards mortgage servicing."
The settlement includes $30.4 million in payments to borrowers and a separate payment to state mortgage regulators.
Borrowers who were foreclosed on by PHH during the eligible period will qualify for a minimum $840 payment, and borrowers who were threatened with foreclosures that PHH initiated during the eligible period, but who did not lose their home, will receive a minimum $285 payment. A settlement administrator will contact eligible recipients at a later date.