A settlement agreement was reached today with 800 New Yorkers for a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation.
The settlement agreement reached by 49 states, the District of Columbia and 45 state mortgage regulators 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 $45 million settlement includes $30.4 million in payments to borrowers, and additional payments to states and mortgage regulators for costs and fees related to the investigation.
Over 800 New York borrowers applied for payments. Rust Consulting, the settlement administrator, issued checks to claimants on Friday, May 31, 2019. Borrowers who lost their homes to foreclosure during the eligible period will receive approximately $1,500, and borrowers referred (but did not ultimately lose their home) to foreclosure will receive approximately $540. Total payments to New York State borrowers exceeds $666,000.
The settlement agreement also 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.
Attorney General Letitia James made the announcement.
“Today, homeowners who were unfairly and unwittingly victimized receive a piece of justice that they deserve,” said Attorney General Letitia James. “It is unfortunate that New York homeowners were victimized by improper mortgage servicing in the first place, but are at least now receiving the financial compensation owed to them. We will continue to use every resource at our disposal to reverse the damaging practices that helped to create the foreclosure crisis, and hold bad-acting mortgage companies accountable.”
“Empire Justice Center applauds Attorney General Letitia James for representing New York homeowners in the recent multi-state settlement with PHH Mortgage Corporation,” said Kirsten Keefe, Senior Attorney and Program Director for HOPP Anchor Partner Program at the Empire Justice Center. “The settlement requires PHH to clean-up its mortgage servicing practices so that they help, rather than harm homeowners. In addition, over 800 New Yorkers will share in a total of cash payments of more than $660,000. Fortunately in New York State, many homeowners who might have otherwise lost their homes because of the misconduct of PHH, received assistance from housing counseling and legal service providers funded through the Attorney General’s Homeowner Protection Program (HOPP) and so remain in their homes. We are very fortunate to have an Attorney General who is continuing to press for the rights of New York’s homeowners and communities.”
“We commend the Attorney General’s office for holding mortgage servicer’s accountable for their actions to protect New Yorker’s homes, which is their largest and most important asset,” said Susan Boss, Executive Director of The Housing Council at PathStone. “Along with the A.G’s office, we will continue to advocate for all New York homeowners.”
“We are thankful to Attorney General James for her dedicated support of New York homeowners,” said Christie Peale, CEO and Executive Director of the Center for NYC Neighborhoods. “This settlement provides direct compensation to hundreds of families, some of whom lost their homes to foreclosure during the financial crisis. Just as importantly, it shows that New York State will hold other mortgage lenders and servicers accountable for fully complying with all servicing regulations, and treating homeowners equitably.”
The case was handled Deputy Bureau Chief Laura J. Levine under the supervision of Bureau Chief Jane M. Azia in the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General of Economic Justice Christopher D’Angelo.