TRENTON, N.J. (Legal Newsline) - New Jersey Acting Attorney General John Hoffman announced a $6.25 million consent judgment Wednesday with a mortgage servicer that allegedly misled financially strapped homeowners who sought loan modifications.
PHH Mortgage Corporation, the nation's ninth-largest residential mortgage servicer, allegedly engaged in multiple violations of the New Jersey Consumer Fraud Act. The allegations include assessing improper late fees and other fees, making inaccurate statements to consumers about foreclosure proceedings and making inaccurate statements about how long it would take to process loan modification requests.
"This settlement provides relief to a large number of individual consumers who were subjected to unacceptable mortgage servicing practices," Hoffman said. "It also ensures appropriate reforms in PHH's mortgage-servicing operations."
Under the terms of the settlement, PHH will provide $3.61 million in restitution for approximately 2,000 borrowers and pay $2.64 million in penalties to the state. PHH will also adopt nationwide servicing standards and provide the state with detailed information on a quarterly basis for the next two years. PHH must inform the state about its activities related to foreclosure actions, mortgage modifications and the resolution of borrower calls to its loss mitigation department.
PHH admitted no liability or wrongdoing as part of the agreement.
N.J. AG reaches $6.25 million settlement with mortgage servicer
