67 Hawai‘i Borrowers Affected in $45M Mortgage Company Settlement

Department of Justice file image.

Hawai‘i Attorney General Doug Chin, 48 other state attorneys general, the District of Columbia and over 45 state mortgage regulators have reached a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation.

The settlement resolves allegations that PHH, the nation’s ninth largest non-bank residential mortgage servicer, improperly serviced mortgage loans from Thursday, Jan. 1, 2009, through Thursday, Dec. 31, 2012. The agreement requires PHH to adhere to comprehensive mortgage servicing standards, conduct audits, and provide audit results to a committee of states. The settlement does not release PHH from liability for conduct that occurred beginning in 2013.

“This settlement holds PHH accountable for the harms that 67 Hawai‘i borrowers suffered from improper loan servicing,” Attorney General Chin said. “The agreement places new servicing standards upon PHH and provides financial relief to aggrieved homeowners.”

Borrowers who were subjected to PHH foreclosures during the eligible period will qualify for a minimum $840 payment, and borrowers who faced foreclosures that PHH initiated during the eligible period, but did not lose their home, will receive a minimum $285 payment. Approximately 67 Hawai‘i borrowers are eligible. A settlement administrator will contact eligible payment recipients at a later date.

The settlement:

  • Provides $31 million in cash payments for up to 52,000 borrowers who lost their homes to foreclosure (Hawai‘i had 19 borrowers) from Thursday, Jan, 1, 2009 to Thursday, Dec. 31, 2012, or were in the foreclosure process (Hawai‘i had 48 borrowers) during that period
  • Mandates that PHH submit an administrative penalty of $8.8 million to state regulators
  • Establishes a set of servicing standards the company must follow going forward

“This settlement demonstrates a core responsibility of state regulators to protect consumers from bad actors and bad business practices,” said Financial Institutions Commissioner Iris Ikeda. “With this settlement, we are making it clear that we will not tolerate mortgage servicers that harm consumers in anyway. As part of this settlement, States are requiring corrective actions so that PHH’s future mortgage servicing activity ensures timely and accurate processing of loan payments.”

Hawaii Attorney General Seeks Documents From Opioid Manufacturers and Distributors

Hawaii has joined a bipartisan coalition of states seeking documents and information today from manufacturers and distributors of prescription opioids. This is part of a multistate investigation into the nationwide opioid epidemic. This information will let state attorneys general evaluate whether manufacturers and distributors engaged in unlawful practices in the marketing, sale, and distribution of opioids. 41 state attorneys general are participating in the multistate investigations.

In Hawaii and across the country, opioids – both prescribed and illicit – are a main driver of drug overdose deaths. According to the Centers for Disease Control and Prevention, opioids were involved in 33,091 deaths in 2015 including 169 in Hawaii. Opioid overdoses have quadrupled since 1999.

Attorney General Chin said, “Under Governor David Ige’s leadership, my office and the state health department are determined to educate the public here and enforce laws to prevent the spread of opioid abuse in Hawaii.”

The attorneys general served investigative subpoenas for documents and information – also known as Civil Investigative Demands – on Endo, Janssen, Teva/Cephalon, Allergan, and their related entities, as well as a supplemental Civil Investigative Demand on Purdue Pharma. The attorneys general also sent information demand letters to opioid distributors AmerisourceBergen, Cardinal Health, and McKesson requesting documents about their opioid distribution business.