The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ) and the U.S. Attorney’s Offices, District of New Jersey, District of Minnesota, and Southern District of Florida, in the civil investigation of PHH Corporation, PHH Mortgage Corporation (PHHMC), and PHH Home Loans, LLC (PHHHL), collectively referred to as PHH. PHH was a direct endorsement lender having its principal place of business in Mount Laurel, NJ.
On August 3, 2017, PHH entered into a settlement agreement with the Federal Government to pay $65 million in a combined settlement amount. The United States attributes $45.5 million to PHHMC and $19.5 million to PHHHL. PHH agrees that it engaged in certain conduct related to FHA-insured mortgages in connection with PHHMC’s and PHHHL’s origination, underwriting, endorsement, and quality control of single-family residential mortgage loans insured by FHA between January 1, 2006, and December 31, 2011, that resulted in claims for payment submitted to FHA on or before June 30, 2013. The settlement agreement is neither an admission of liability by PHH nor a concession by the United States that its claims were not well founded.
As a result of PHH’s conduct and omissions, HUD insured loans approved by PHH that were not eligible for FHA mortgage insurance under the direct endorsement program and that HUD would not otherwise have insured. HUD incurred substantial losses when it paid insurance claims on these loans. Of the total $65 million settlement, HUD FHA will receive $42.6 million.