Mortgage firm to pay $74M in FHA case
MINNEAPOLIS — Federal prosecutors in Minnesota say financial services firm PHH Corp. and two subsidiaries have agreed to pay more than $74 million to settle allegations they violated standards for underwriting government-backed mortgages.
Acting U.S. Attorney for Minnesota Gregory Brooker said in a statement Tuesday that Mount Laurel, N.J.-based PHH, named for its three founders, submitted defective loans for government insurance, and that homeowners and taxpayers paid the price.
The settlement includes $65 million for violations involving loans insured by the Federal Housing Administration, and nearly $9.5 million for loans guaranteed by the Department of Veterans Affairs. The government said it incurred “substantial losses” in paying insurance claims on the FHA loans. About $9 million will go to a whistleblower who formerly worked for PHH.
PHH says it settled without admitting liability to avoid the distraction and expense of litigation.