It’s 2018 and the mortgage settlements continue. As part of an agreement reached today with 49 states and Washington D.C., PHH Mortgage Corp. will pay out $30.4 million to borrowers impacted by so-called improper mortgage servicing.
The company, which is the ninth largest non-bank residential mortgage servicer in the country, was accused of improperly servicing home loans from January 1st, 2009 through December 31st, 2012.
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The complaint filed by the state attorneys general alleged that PHH “threatened foreclosure and conveyed conflicting messages” to some homeowners who were taking part in loss mitigation efforts.
This was a common issue during the aftermath of the housing crisis, whereby some lenders would engage in dual tracking, which simultaneously pushes a borrower toward foreclosure while their loan modification is being processed.
The practice has since been outlawed, and lenders are required to pump the brakes on foreclosure if another loss mitigation option is being administered.
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PHH was also accused of charging “unauthorized fees for default-related services,” along with failing to maintain adequate documentation pertaining to the foreclosure.
They also apparently failed to respond to borrowers’ complaints in a timely manner, or apply payments made by certain borrowers.
In addition, the complaint claims that PHH didn’t properly oversee its third-party vendors or preserve accurate account statements.
As such, it has agreed to pay out more than $30 million to affected borrowers, along with additional monies to individual states and mortgage regulators for the costs and fees related to this investigation.
The agreement also requires PHH to conduct audits of its practices, provide the accompanying results to a committee of states, and comply with comprehensive mortgage servicing standards.
Are You Eligible for Relief from PHH Mortgage?
If your mortgage was serviced by PHH between January 1st, 2009 and December 31st, 2012, you might be eligible for a cash payment.
For eligible borrowers who were foreclosed on during that period, a minimum payment of $840 will be doled out.
For those who had a foreclosure initiated, but didn’t actually lose their home, a minimum payment of $285 will be sent.
A settlement administrator will contact eligible payment recipients at a later date that has yet to be disclosed.
It should be noted that some states reached earlier settlements with PHH, and borrowers who received compensation in those cases may not be eligible for additional monies.
In New Jersey, some 280 foreclosed borrowers may be eligible for relief, along with more than 1,700 borrowers who didn’t lose their homes.
In New York, approximately 1,600 individuals are eligible for a payment via this settlement.
In North Carolina, some 1,080 borrowers will receive a total of $720,165.
And in Florida, some 5,400 borrowers will be eligible for a payment. More than 10% of eligible PHH borrowers are located in the Sunshine State.
These are just some of the states involved. For more information, check your state attorney general website and/or look out for materials in the mail from PHH.
You can also be proactive and reach out to PHH to try to get the ball rolling earlier.
The only state that isn’t part of the agreement, at least at this juncture, is New Hampshire. It is unclear if they’ll take part.