“Real Deal: New Jersey-Based Lender Agrees to Pay $45M to Settle Mortgage Misconduct Claims”
January 4, 2018
As published by The Real Deal, on January 3rd, 2018.
A New Jersey-based lender agreed to pay $45 million to settle claims that it improperly serviced home loans in 49 states, including New York.
PHH Mortgage Corporation, the nation’s ninth largest non-bank residential mortgage servicer, was accused of charging bogus fees, failing to apply borrowers’ payments on time, threatening foreclosure on borrowers engaged in loss mitigation and failing to keep proper documentation on the rationale for foreclosures between January 2009 and December 2012, according to documents filed in federal court on Wednesday. New York officials announced the settlement on Wednesday — which appears to be the same day the complaint was filed publicly — and noted that 1,600 New Yorkers will be eligible for payouts from the settlement.
“The foreclosure crisis continues to devastate communities across New York,” New York Attorney General Eric Schneiderman said in a statement. “We have zero tolerance for the types of practices that helped create the crisis – and will hold mortgage companies to account.”
PHH’s parent company — PHH Corporation — noted in a statement that the settlement doesn’t mean that the company is admitting liability for violation of the law.
“In fact, the servicing standards that we are required to adopt under the terms of the settlement are largely PHH’s servicing standards today,” PHH Corporation said. “We have made and will continue to make the necessary enhancements in our operations to ensure we remain compliant and continue to serve our customers in a fair and appropriate manner.”
Florida and California were among the other states that filed the complaint against PHH. Florida Attorney General Pam Bondi announced on Wednesday that borrowers from the state will receive $2.8 million from the settlement.
The company has faced similar allegations in recent years. In 2016, the New York Department of Financial Services fined PHH $28 million for “discrepancies in how mortgage foreclosures were documented and processed,” according to the agency. The company was also accused of giving customers inaccurate loan estimates, charging larger fees than expected at closing and failing to provide accurate documentation of discounts to which customer’s had agreed.
PHH is also still involved in a protracted legal fight against the Consumer Financial Protection Bureau. The company was fined $109 million for referring customers to insurers who then bought reinsurance from one of PHH’s subsidiaries, according to Politico. The company fired back by suing the CFPB, claiming the fine was unfair and was issued by an unconstitutionally structured agency.