PHH Reaches Nationwide Settlement Over Crisis-Era Mortgage Servicing

PHH will pay $45 million in settlement with 49 states

January 3, 2018 | HousingWire         PHH Corp. will pay $45 million as part of a nationwide settlement over mortgage servicing and foreclosure issues during the housing crisis, a group of nearly every state attorney general announced Wednesday.

The settlement requires PHH to adopt new servicing standards and provide monetary relief to affected borrowers, though the company counters it already currently uses said standards.

The settlement covers the company’s mortgage servicing practices, including foreclosure activities, between Jan. 1, 2009 and Dec. 31, 2012.

The settlement is between PHH and the Multi-State Mortgage Committee, including more than 45 state mortgage regulators, along with 49 state attorneys general, and the District of Columbia.

Every state took part in the settlement, with the exception of New Hampshire. It is unknown at this time why New Hampshire is not a party in the settlement. HousingWire contacted the New Hampshire Attorney General, and this article will be updated should the AG respond.

According to the complaint filed by the state attorneys general, PHH “threatened foreclosure and conveyed conflicting messages to certain borrowers engaged in loss mitigation.”  Read more here.

Mortgage Industry Panics Over Obscure Provision in Senate Tax Bill

November 29, 2017 | Bloomberg            The mortgage industry is panicking over a provision in the Senate tax bill that some analysts and trade groups say may drive small lenders out of the business.

The Mortgage Bankers Association and other bank and mortgage trade groups scrambled over Thanksgiving weekend after staff members discovered a provision in the bill that would change the time at which lenders pay taxes on the streams of income they earn from managing borrowers’ mortgages.

That change could cost banks tens of billions of dollars as the value of those income streams drops. The reduction would be enough to drive smaller lenders and non-bank lenders to either exit the mortgage market altogether or restructure their businesses, said MBA president David Stevens.

“It’s a fire drill,” Stevens said. “We’re scrambling to get people on phone calls. It would cause a significant disruption in the industry.”

It’s unclear whether Senate tax writers intentionally targeted lenders -- or whether they intend to leave the provision in place. The episode may reflect the unusual speed with which the Senate is trying to approve legislation that was introduced in written form only nine days ago. Senate leaders plan to vote on the bill Thursday or Friday.

“As Congress continues to debate the Senate’s tax reform plan that was reported out of the Finance Committee, Chairman Hatch will work with members to make the appropriate policy decisions to help deliver a comprehensive tax overhaul that will grow the economy, boost job creation, and increase paychecks for the American people,” Julia Lawless, a Senate Finance Committee spokeswoman, said in an email.

For lenders, the issue surrounds a central way they make money. When a borrower takes out a loan, lenders often sell that loan to government-backed companies, while keeping the right to collect borrower payments and manage the loan. Those so-called mortgage servicing rights are a valuable asset, and lenders often sell them to each other or to outside investors such as hedge funds when they want cash.  Read more here.

OCC Terminates JPMorgan and EverBank Mortgage Servicing Consent Orders

HousingWire |  January 5, 2016     The Office of the Comptroller of the Currency terminated mortgage servicing-related consent orders against JPMorgan Chase and EverBank because it determined that the institutions now comply with the orders.  

The OCC also assessed a $48 million civil money penalty against JPMorgan and a $1 million civil money penalty against EverBank.

As a result of the termination, the two banks no longer have business restrictions that were mandated back in June 2015.   Read more here