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NJ mortgage company to pay $45 million in multi-state settlement

A mortgage company that improperly serviced loans for four years will pay New Jersey borrowers nearly three-quarters of a million dollars, under a settlement announced by Attorney General Christopher Porrino.
PHH Mortgage Corporation has entered a $45 million settlement with 45 states and the District of Columbia.
Borrowers who were subjected to PHH foreclosures during the eligible period will qualify for at least $840, and those who faced foreclosures that PHH initiated during the eligible period, but did not lose their homes, will qualify for a minimum $285 payment.
In New Jersey, PHH is expected to make an estimated total of $746,925 in direct payments to harmed borrowers, including more than 280 foreclosed borrowers who are eligible for the $840 minimum, and more than 1,700 eligible for at least $285.
The nation’s ninth largest non-bank residential mortgage servicer, PHH was accused of improperly servicing mortgage loans from Jan. 1, 2009, through Dec. 31, 2012.
“This settlement holds PHH accountable for harm suffered by a significant number of borrowers in New Jersey and across the nation as a result of improper mortgage servicing,” Porrino said. “The agreement requires new servicing standards to help ensure that PHH doesn’t repeat the kind of conduct that led to its questionable mortgage practices, and to provide financial relief to aggrieved homeowners. We remain committed to ensuring that companies who loan money to New Jersey homeowners do so in a manner that is transparent and fair.”
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 the Mount Laurel-based company from liability for conduct that occurred beginning in 2013.
The multi-state settlement announced today includes $30.4 million in payments to borrowers, plus additional payments to 12 state attorneys general who led the investigation and negotiations, and a separate payment to state mortgage regulators.
A settlement administrator will contact eligible payment recipients at a later date.
In December 2013, New Jersey entered into a $6.25 million settlement with PHH that resolved the state’s own investigation into allegations that PHH misled financially struggling homeowners who sought loan modifications or other help to avoid mortgage delinquency or foreclosure.
The 2013 settlement included $3.61 million in restitution for about 2,000 borrowers in New Jersey and across the country whose loans were serviced by PHH.
Any PHH borrower who received restitution as part of the company’s 2013 settlement with New Jersey will not be among those borrowers eligible to receive payments as part of the multi-state agreement announced Wednesday.

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