PHH Mortgage has faced more than a decade of lawsuits and settlements, paying out roughly a quarter of a billion dollars to resolve federal False Claims Act allegations, state servicing investigations, HUD fee refunds, and class actions over misleading foreclosure notices. The company was renamed Onity Mortgage Corporation on March 23, 2026, but the settlements, consent orders, and pending class action payments established under the PHH name remain in force.1Onity Group. Onity Group Officially Rebrands PHH Mortgage to Onity Mortgage
The $74 Million False Claims Act Settlement
The largest single payout came in August 2017, when PHH Corp., PHH Mortgage Corp., and PHH Home Loans agreed to pay $74,453,802 to resolve federal allegations that they knowingly originated and underwrote defective mortgage loans backed by the Federal Housing Administration, the Department of Veterans Affairs, Fannie Mae, and Freddie Mac.2U.S. Department of Justice. PHH Agrees To Pay Over $74 Million To Resolve Alleged False Claims Act Liability Of that total, $65 million covered FHA claims and $9.45 million covered VA, Fannie Mae, and Freddie Mac claims.3U.S. Department of Justice. PHH Agrees To Pay Over $74 Million To Resolve Alleged False Claims Act Liability Arising From Mortgage Lending
PHH admitted specific misconduct on FHA loans originated between January 2006 and December 2011. The company certified loans for FHA insurance without meeting HUD underwriting requirements, missed borrower documentation like paystubs and employment records, miscalculated debt-to-income ratios by leaving out prior debts, and insured loans where borrowers had not met the minimum statutory investment. A 2007 internal audit had shown loan file accuracy at 50% or lower, but PHH did not self-report any material violations to HUD until 2013, after federal investigators had already begun looking.3U.S. Department of Justice. PHH Agrees To Pay Over $74 Million To Resolve Alleged False Claims Act Liability Arising From Mortgage Lending
The case began as a 2013 whistleblower suit filed by former PHH employee Mary Bozzelli, who received $9,067,377 of the settlement under the False Claims Act’s qui tam provisions.2U.S. Department of Justice. PHH Agrees To Pay Over $74 Million To Resolve Alleged False Claims Act Liability
The CFPB Kickback Case PHH Won
In January 2014, the Consumer Financial Protection Bureau brought an administrative case against PHH over what it described as a captive reinsurance scheme running as far back as 1995. The Bureau alleged PHH referred borrowers to private mortgage insurers, who in turn bought reinsurance from PHH’s subsidiary Atrium Insurance Corporation, and that these payments were illegal kickbacks under Section 8 of the Real Estate Settlement Procedures Act. CFPB Director Richard Cordray personally ordered PHH to disgorge $109 million.4Justia. PHH Corp. v. Consumer Financial Protection Bureau
PHH won on appeal. In October 2016, a D.C. Circuit panel held that RESPA permits captive reinsurance so long as payments reflect reasonable market value, that the CFPB had violated due process by retroactively applying a new interpretation to conduct PHH had undertaken in reliance on prior HUD guidance, and that a three-year statute of limitations applied. The $109 million penalty was vacated. On January 31, 2018, the full D.C. Circuit sitting en banc reinstated the panel’s statutory holdings on RESPA, and the penalty stayed vacated.5Justia. PHH Corp. v. CFPB (En Banc) The court unanimously agreed the CFPB had acted in a “fundamentally unfair way.”6Yale Journal on Regulation. Fair Notice and the CFPB: The Other Constitutional Ruling in PHH v. CFPB The CFPB’s own docket now lists the matter as “Expired/Terminated/Dismissed.”7Consumer Financial Protection Bureau. PHH Corporation Enforcement Action
State Attorneys General and Regulator Settlements
PHH’s servicing practices drew a second wave of enforcement from state officials, with borrower relief attached to each settlement.
$45 Million Multistate AG Settlement (2018)
In January 2018, PHH reached a $45 million settlement with 49 state attorneys general and the District of Columbia over improper servicing of mortgages between January 2009 and December 2012, which state officials said led to premature and unauthorized foreclosures against thousands of homeowners.8Office of the Attorney General for the District of Columbia. State Attorneys General and State Mortgage Regulators Announce Settlement With PHH Mortgage Corporation Borrowers received the bulk of the money: $30.4 million was set aside for direct payments, with at least $840 to those who lost homes to a PHH foreclosure during the period and at least $285 to those who faced foreclosure but kept their homes.9New Jersey Office of the Attorney General. Multi-State Settlement With PHH Mortgage Corporation The settlement did not release PHH for conduct on or after January 1, 2013.10Texas Attorney General. Multi-State Settlement With PHH Mortgage Corporation
State Mortgage Regulator Consent Order (2017)
A separate multistate examination of PHH’s servicing from 2008 through 2010 identified unauthorized document execution, inconsistent signatures, faulty mortgage assignments, improper notarization, deficiencies in loss mitigation and foreclosure, inadequate staffing, and poor oversight of outside foreclosure attorneys. Under a consent order effective December 29, 2017, PHH paid $31,456,210 for borrower relief and $8,823,515 in administrative penalties split among participating states.11California Department of Financial Protection and Innovation. PHH Mortgage Corporation Settlement Agreement and Consent Order
New York DFS Fine (2016)
The New York Department of Financial Services fined PHH Mortgage and PHH Home Loans $28 million in November 2016 for problems on both the origination and servicing sides: inaccurate good-faith loan estimates, excess fees, missing formal policies for foreclosure document execution, weak monitoring of outside foreclosure counsel, and compensation plans that failed to prevent steering borrowers into high-cost loans. PHH had discovered a $1.2 million error in attorney fee charges against New York borrowers in default in June 2014 but did not report it to DFS until January 2016.12New York Department of Financial Services. DFS Fines PHH Mortgage Corporation and PHH Home Loans $28 Million
Maine Consent Agreement (2019)
In July 2019, Maine’s Bureau of Consumer Credit Protection reached an agreement with Ocwen Financial (PHH’s parent at the time) over Ocwen Loan Servicing’s use of invalid authority to file foreclosures in the state. After the bankrupt lender Aegis Mortgage Corp. dissolved, Ocwen continued executing and recording mortgage documents under Aegis powers of attorney it no longer had the right to use, and filed 24 Maine foreclosure cases relying on unauthorized assignments. Ocwen was ordered to stop, reimburse attorney fees collected from affected borrowers, pay $10,000 in investigation costs, and pay a $1,000 civil penalty for each improperly filed foreclosure.13Maine Bureau of Consumer Credit Protection. Consent Agreement: Ocwen Loan Servicing and PHH Mortgage Corporation
2025 HUD Settlement Over Pay-by-Phone Fees
In January 2025, HUD settled with PHH over unauthorized “pay-to-pay” fees charged to borrowers who made mortgage payments by phone or online. HUD found that processing payments is a routine servicing function servicers are already compensated for, and that PHH had never obtained HUD approval to charge extra for these transactions.14Compliance Alliance. HUD Reaches Historic Settlement With PHH Mortgage Corporation To Refund Wrongfully Charged Junk Fees
PHH agreed to return roughly $3,465,000 to about 51,500 borrowers across approximately 490,000 transactions between May 2021 and February 2023, and paid $245,000 to HUD. The company stopped charging the fees in February 2023. The settlement was not an admission of fault.14Compliance Alliance. HUD Reaches Historic Settlement With PHH Mortgage Corporation To Refund Wrongfully Charged Junk Fees A related class action filed in July 2020 in the Southern District of Texas alleged the same fees ran from $7.50 to $19.50 per transaction and that PHH kept much of the money as profit rather than passing it to third-party processors.15ClassAction.org. Pay-to-Pay Class Action Against PHH Mortgage Corp. Bumped to Texas Fed. Court
Williams Default Notice Class Action (2026)
The most recent settlement is Williams et al. v. PHH Mortgage Corporation, a $1.5 million class action reached in March 2026 in the Western District of North Carolina. Plaintiffs alleged PHH sent misleading notices of default that threatened immediate loan acceleration and foreclosure, even though PHH could not legally accelerate or foreclose until a loan was at least 120 days delinquent. The claims were brought under the federal Fair Debt Collection Practices Act, California’s Rosenthal Act, and North Carolina’s Debt Collection Act and Collection Agency Act.16Williams PHH Settlement. Williams et al. v. PHH Mortgage Corporation Settlement
The $1.5 million was split into three equal $500,000 funds: a nationwide FDCPA class, a California class, and a North Carolina class. PHH denied the allegations and said its notice practices were contractually required. Class members do not need to file a claim; payments go out automatically to those who do not opt out. The deadline to opt out or object is May 5, 2026, and a fairness hearing is scheduled for June 9, 2026. PHH also agreed to pay up to $200,000 in administrative costs separately from the settlement funds.17Williams PHH Settlement. Williams et al. v. PHH Mortgage Corporation – FAQs18ClassAction.org. Williams v. PHH Mortgage Settlement Agreement
What This Means If You Had a PHH Loan
If PHH serviced or originated your mortgage, several settlements have already sent payments directly to affected borrowers without a claim form, including the $45 million multistate AG deal, the 2017 state regulator consent order, the 2025 HUD pay-to-pay refunds, and the Williams class action currently distributing money in 2026. Deadlines matter for the Williams case in particular: to remain in the class and receive a payment, do nothing; to preserve the right to sue PHH separately over the same conduct, opt out by May 5, 2026.
The rebrand does not erase these obligations. Onity Group’s SEC filings confirm the company remains subject to ongoing consent orders and regulatory supervision from the CFPB, HUD, and state authorities, and acknowledges continuing legal proceedings and regulatory examinations.19Onity Group. Onity Group SEC Filing20S&P Global Ratings. PHH Mortgage Corp. Servicer Evaluation1Onity Group. Onity Group Officially Rebrands PHH Mortgage to Onity Mortgage Correspondence about older PHH conduct now typically comes from Onity, but the underlying settlement rights and refund obligations follow the loan, not the letterhead.