New Jersey-based PHH Corp. has reached a $6.25 million settlement with state authorities to resolve allegations that it deceived distressed homeowners who sought mortgage modifications in an effort to avoid delinquency or foreclosure.
According to acting New Jersey Attorney General John Hoffman, the settlement includes $3.61 million in restitution for approximately 2,000 U.S. borrowers whose loans were serviced by PHH. For example, 44 borrowers whose homes were sold in sheriff’s sales while loan modifications were pending will receive $10,000 each. The state of New Jersey, meanwhile, will receive $2.64 million.
PHH -- which admits no wrongdoing or liability -- will adopt nationwide servicing standards and for two years will provide the state with quarterly data on its activities related to mortgage modifications, foreclosure actions, and the resolution of borrower calls to its loss-mitigation department.