PHH Mortgage lawsuits span more than a decade and include a $74 million False Claims Act settlement over defective FHA loans, a $45 million multistate deal over improper foreclosures, a long-running class action over mortgage insurance kickbacks, and recent settlements over unauthorized payment fees and misleading default notices. The company was acquired by Ocwen in 2018 and, on March 23, 2026, was renamed Onity Mortgage Corporation, though the older PHH-branded claims and settlements continue.1Onity Group Inc. Onity Group Officially Rebrands PHH Mortgage to Onity Mortgage If you had a PHH-serviced mortgage, two settlements are actively paying borrowers right now, and a third has already sent automatic refunds.
Settlements Currently Paying Borrowers
Munoz v. PHH — Mortgage Insurance Kickbacks ($875 per Loan)
Filed in June 2008 in the Eastern District of California, Munoz et al. v. PHH Corp. et al. (No. 1:08-cv-00759) alleges PHH violated Section 8 of the Real Estate Settlement Procedures Act by routing private mortgage insurance payments through its affiliate Atrium Insurance Corporation. According to the complaint, Atrium took on little or no real reinsurance risk, meaning the payments amounted to illegal referral fees and borrowers overpaid for their mortgage insurance.2ClassAction.org. PHH Settlement Offers $875 Payouts to Resolve Class Action Over Alleged Mortgage Insurance Kickbacks
A class of borrowers with loans originated between January 2007 and December 2009 was certified in June 2015. The district court dismissed the case for lack of standing in January 2022, but the Ninth Circuit reversed in February 2023 and sent it back.3Onity Group Inc. Onity Group Inc. SEC Filing, Legal Proceedings The parties then settled. Preliminary approval came on August 11, 2025, and final approval on December 19, 2025. Eligible class members receive $875 per qualifying loan.4PHH MI Settlement. Munoz et al. v. PHH Corp. et al. Settlement
Payment is not automatic in this case. You must submit a valid claim form, online or by mail, by August 11, 2026. The settlement also authorizes up to $9,031,000 in attorneys’ fees, up to $2,100,000 in litigation expenses, up to $500,000 in administrative costs, and up to $5,000 for each of the five class representatives.5Munoz Settlement Notice. Munoz et al. v. PHH Corp. et al. Long Form Notice PHH continues to deny wrongdoing.
Williams v. PHH — Misleading Default Notices
Williams et al. v. PHH Mortgage Corporation (No. 3:25-cv-00144-KDB-UMJ) is pending in the Western District of North Carolina before Judge Kenneth D. Bell. Plaintiffs Tonia Williams and Beverly Dantzler allege PHH’s Notices of Default warned borrowers the loan would be accelerated and foreclosure begun if the default was not cured by a stated deadline, when in fact federal rules bar acceleration or foreclosure until the loan is at least 120 days delinquent — roughly 30 days after the notice deadline. The complaint invokes the federal Fair Debt Collection Practices Act, California’s Rosenthal Act, the North Carolina Debt Collection Act, and the North Carolina Collection Agency Act.6ClassAction.org. Williams v. PHH Mortgage Corporation Settlement Agreement PHH denies the allegations, calling its notice language “inherently unthreatening conditional language” required by the loan documents.7Williams PHH Settlement. Williams et al. v. PHH Mortgage Corporation Settlement
A proposed $1.5 million settlement received preliminary approval on February 4, 2026. The money is divided into three $500,000 pools by class:
- FDCPA class: borrowers anywhere in the United States whose loans were acquired by PHH while 30 or more days delinquent and who received a Notice of Default between December 18, 2022, and December 15, 2025.
- California class: borrowers with California properties who received a Notice of Default during that same window.
- North Carolina class: borrowers with North Carolina properties who received a Notice of Default between January 14, 2021, and December 15, 2025.
You do not need to file a claim. Eisner Advisory Group LLC will mail checks automatically. Individual payouts depend on delinquency status and the number of opt-outs. The deadline to opt out or object is May 5, 2026, and the final fairness hearing is scheduled for June 9, 2026.8Top Class Actions. $1.5M PHH Mortgage Corp. Misleading Default Notices Class Action Settlement
HUD Junk Fees Refunds
On January 13, 2025, HUD announced a settlement requiring PHH to refund about $3,465,000 to roughly 51,500 borrowers charged “pay-to-pay” or “convenience” fees for making mortgage payments by phone or online between May 2021 and February 2023. PHH also paid $245,000 to HUD for administrative costs.9HUD. HUD Reaches Historic Settlement With PHH Mortgage Corporation HUD said processing payments is a standard servicing activity for which the servicer is already compensated, making the extra charge unauthorized under FHA rules. The roughly 490,000 covered transactions involved payments made through a phone representative, an automated phone line, or online while the borrower was not enrolled in PHH’s paperless statement program.10HousingWire. HUD Settles With PHH Over Alleged Mortgage Payment Fees That Violated FHA Rules Refunds are automatic: current PHH borrowers see a credit to their account, and former borrowers receive a check. PHH stopped charging the fees in February 2023 and did not admit fault.
Older Resolved Settlements
Morris v. PHH — Convenience Fees Class Action
A separate class action over the same type of phone and online payment fees settled in Florida federal court. Borrowers Vincent Morris and Michael Luzzi sued PHH and its predecessor Ocwen Loan Servicing in 2020 before Judge Rodney Smith of the Southern District of Florida, alleging the fees were not authorized by the loan documents and violated the FDCPA, the Florida Consumer Collection Practices Act, and the Florida Deceptive and Unfair Trade Practices Act.11Orrick. Morris v. PHH Mortgage, Order Granting Preliminary Approval
An early $12.6 million proposal was rejected because it let PHH keep charging the fees. The parties then reached a revised deal of about $2.77 million, split between an FDCPA fund of roughly $1.23 million and a Florida fund of roughly $1.54 million, covering 141,563 borrowers on more than 105,000 loans. PHH also reduced its online payment fee from $7.50 to $6.50 for two years and agreed to hold phone payment fees at or below existing levels for the same period. Judge Smith gave final approval in December 2022.12Law360. Morris v. PHH Mortgage Corporation
The $45 Million Multistate Foreclosure Settlement
On January 3, 2018, PHH agreed to pay $45,279,725 to resolve claims by 48 state attorneys general, the District of Columbia, and more than 40 state mortgage regulators that it had improperly serviced mortgages and pushed forward premature or unauthorized foreclosures between January 2009 and December 2012.13Virginia Office of the Attorney General. State AGs and Mortgage Regulators Reach $45 Million Settlement With PHH Mortgage Corporation
Of the total, $31,456,210 went to affected borrowers. Those who lost their homes received a minimum of $840; those who faced foreclosure but kept their homes received at least $285. Another $5 million went to the investigating states and $8,823,515 to state mortgage regulators as an administrative penalty.14Virginia Office of the Attorney General. PHH Consent Judgment The consent judgment also imposed a three-year compliance program beginning January 1, 2018, requiring accurate foreclosure documentation, employee affidavits based on personal knowledge, a ban on volume-based incentives, internal audits, and quarterly reports to an executive committee of government signatories.15Texas Attorney General. PHH Consent Judgment PHH did not admit wrongdoing, and the release did not cover conduct from 2013 onward.
The $74 Million False Claims Act Settlement
On August 8, 2017, PHH paid $74,453,802 to the United States over allegations it had knowingly originated and underwritten defective mortgage loans submitted to federal programs. Of that, $65 million covered FHA-insured loans and $9.45 million covered VA-guaranteed loans purchased by Fannie Mae and Freddie Mac.16U.S. Department of Justice. PHH Agrees to Pay Over $74 Million to Resolve Alleged False Claims Act Liability Arising From Mortgage Lending
The government alleged that between January 2006 and December 2011, PHH certified FHA loans that failed HUD underwriting standards. PHH admitted it had failed to document borrower creditworthiness (missing paystubs, employment verifications, credit reports, and proof of funds to close), omitted significant debts so that debt-to-income ratios exceeded HUD limits, and insured loans where borrowers had not met HUD’s minimum investment requirement. A 2007 internal audit found an accuracy rate of 50 percent or lower on government loans, yet PHH did not self-report a single loan to HUD until 2013, after the federal investigation began.17U.S. Department of Justice. PHH Agrees to Pay $74 Million to Resolve Alleged False Claims Act Liability The settlement resolved a whistleblower suit filed by former PHH employee Mary Bozzelli in May 2013.
The CFPB Captive Reinsurance Case
The Consumer Financial Protection Bureau opened an administrative enforcement action against PHH in January 2014, alleging the captive reinsurance arrangements at Atrium — the same conduct at issue in Munoz — were illegal referral fees under RESPA dating back to at least 1995. Then-Director Richard Cordray ordered PHH to pay $109 million in disgorgement.18CFPB. PHH Corporation Enforcement Action
PHH appealed. The D.C. Circuit ultimately held, en banc on January 31, 2018, that RESPA permits captive reinsurance as long as the reinsurer is paid no more than reasonable market value, that the CFPB had violated due process by retroactively applying a new legal interpretation, and that a three-year statute of limitations applied to the agency’s enforcement. The $109 million order was vacated.19Justia. PHH Corp. v. CFPB, No. 15-1177 (En Banc) The CFPB dismissed the case in June 2018.20National Mortgage Professional. CFPB Dismisses Enforcement Action No borrower payments came out of this action; refunds tied to the reinsurance conduct are being paid through Munoz.
What Remains Open
As of December 31, 2024, Onity Group reported a $16 million accrual for probable and estimable legal and regulatory matters, a figure that includes Munoz and other pending regulatory issues.3Onity Group Inc. Onity Group Inc. SEC Filing, Legal Proceedings The Williams settlement heads to its final fairness hearing on June 9, 2026, and the Munoz claims window stays open until August 11, 2026. If you believe you may be a class member in either case, check the class definitions and deadlines above, and file a claim in Munoz — Williams will pay you automatically if you qualify and do not opt out.