Michigan Attorney General Bill Schuette Wednesday announced his office, 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 $45 million settlement includes $30.4 million in payments to borrowers, and a separate payment to state mortgage regulators. It is estimated that over 2,800 Michigan residents will be eligible for relief payments, including homeowners who lost their property to foreclosure and others for whom PHH initiated foreclosure proceedings during the relevant period but whose foreclosures had not been finalized. Final payment amounts will depend on how many eligible residents file claims.
“This settlement will give Michigan borrowers some compensation for PHH’s improper loan servicing practices,” said Schuette. “The settlement agreement also requires the implementation of heightened standards that are geared toward improving customer service moving forward. I want to thank my Corporate Oversight Division for their continued dedication to protecting Michigan residents from unfair and illegal business practices.”
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 occurring outside that timeframe.
Borrowers who were subjected to PHH foreclosures during the eligible period will qualify for a minimum $840 payment, and borrowers who faced foreclosures that PHH initiated during the eligible period, but did not lose their home, will receive a minimum $285 payment. A settlement administrator will contact eligible payment recipients at a later date.
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