Submitted by the Washington State Department of Financial Institutions
The Washington State Department of Financial Institutions Division of Consumer Services is joining with regulators and Attorneys General in 46 other states today to announce a legal settlement with PHH Mortgage Corp. More than 680 Washington borrowers may be entitled to compensation.
The settlement will assist borrowers harmed by PHH’s severe operational deficiencies in mortgage servicing during 2009-12. The efforts of Multistate Mortgage Servicing Regulators identified practices that may violate state and federal laws and regulations including, but not limited to:
– Lack of controls related to document execution;
– Deficiencies in servicing, foreclosure, and loan modification;
– Deficiencies in control and oversight of third-party providers, particularly local foreclosure counsel; and
– Failure to retain required documents and failure to produce documents.
Provides $31 million in cash payments for almost 52,000 borrowers nationwide who lost their homes to foreclosure or were in the foreclosure process from Jan. 1, 2009, to Dec. 31, 2012;
– Requires PHH to submit an administrative penalty of $8.8 million to state regulators; and
– Establishes a set of servicing standards PHH must follow going forward.
“Washington will not allow residential mortgage servicers to harm consumers by failing to properly service mortgage accounts,” said DFI Division of Consumer Services Director Charles Clark. “The newly established servicing practices should ensure that in the future PHH will timely and accurately process loan payments.”
“This settlement demonstrates a core responsibility of state regulators: to protect consumers from unlawful business practices,” DFI Director Gloria Papiez said. “This settlement exemplifies how multiple state regulators and attorneys general work together to hold accountable those who harm consumers.”
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse. For more information, visit dfi.wa.gov.