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Company settles bad mortgage charges

Serious risks may be associated with entering residential real estate agreements in Arizona. Lack of disclosure and other predatory practices can turn a purchase into a financial debacle for homeowners purchasing real estate and dealing with mortgages.

PHH Mortgage Corp. recently settled with Arizona and 47 other states over allegations concerning its practices during the housing crash. As part of the settlement, over 2,000 families in this state are eligible for part of a $45 million fund set up by the New Jersey-based mortgage lender and servicer to resolve claims.

PHH was accused of charging unauthorized fees to borrowers and failure to process requests for modifications for loans. According to the settlement agreement, the company was also charged with threatening homeowners with mortgage foreclosure although they participated in a program to keep their houses.

As part of the settlement, PHH will pay approximately $30 million to borrowers across the country. Homeowners who were foreclosed by PHH between 2009 and 2012 are eligible for at least $840. Other borrowers who faced foreclosure qualify for at least $285 from the settlement. The Arizona Attorney General's Office announced that a settlement administrator will contact homeowners who qualify for settlement proceeds.

Bank of America, HSBC and several other large lenders and mortgage services were also sued and settled charges of bad mortgage methods during the housing crisis. PPH claimed that this settlement is not admission of wrongdoing and denied that it violated any laws.

The Attorney General of Arizona said that predatory mortgage practices pushed thousands of families in this state into foreclosure. This settlement, according to the Attorney General, requires PHH to adopt new servicing standards that protect consumers.

While this settlement provides a remedy, it cannot fully eliminate the harm that was suffered and assure that homeowners' interests are fully protected. Obtaining a qualified lawyer to negotiate and review residential property and mortgage agreements can help homeowners in these transactions.

Source: AZCentrail.com, "Thousands in Arizona could get $45M settlement over bad foreclosure practices," By Catherine Reagor, The Republic, Jan. 4, 2018

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