PHH Mortgage Corp. agreed to a $45 million settlement to resolve allegations of improperly servicing loans from 2009 to 2012.
The New Jersey-based mortgage lender and servicer reached the agreement with 49 states, Washington, D.C., and 45 state mortgage regulators, according to state Attorney General Eric T. Schneiderman.
PHH has drastically cut its employment in the Buffalo area. Several years ago, the company had 400 local employees, after HSBC Bank USA transferred its mortgage processing and servicing business to PHH.
PHH had ambitions to grow even larger, but instead steadily reduced its employment and moved out of a new building on Wehrle Drive in Amherst. The company now has 18 employees in the region who work as telecommuters, said Dico Akseraylian, a PHH spokesman.
The agreement announced Wednesday requires PHH to follow "comprehensive mortgage servicing standards," conduct audits and provide audit results to a committee of states, Schneiderman said.
Of the $45 million, $30.4 million will be paid to borrowers, with additional payments to states and mortgage regulators for costs tied to the investigation.
About 1,600 New York state residents are eligible for payments. A settlement administrator will contact eligible recipients at a later date.
Schneiderman said borrowers who went through PHH foreclosures from 2009 through 2012 will qualify for a minimum $840 payment. Borrowers who faced PHH foreclosures started by PHH during the eligible period, but who did not lose their home, will receive minimum payments of $285.
Schneiderman said the agreement does not release PHH Mortgage from liability for conduct that occurred starting in 2013.