The mortgage company will pay millions to settle allegations it violated underwriting standards on government-backed mortgages
Mortgage company PHH and two subsidiaries have agreed to pay more than $74 million in order to settle a probe into alleged violations of underwriting standards for government-backed mortgages.
Read more: Lenderlive completes takeover of PHH private-label business
According to Acting US Attorney for Minnesota Gregory Booker, PHH submitted defective loans for Federal Housing Administration and VA insurance. The government said it had incurred “substantial losses” paying insurance claims on defective FHA loans issued by PHH, according to a Reuters report.
Read next: Leadership shake-up at PHH
PHH will pay $65 million for alleged violations for loans issued by the FHA and about $9.5 million for VA-guaranteed loans, according to Reuters. A former PHH employee who acted as a whistleblower in the case will receive about $9 million.
PHH did not admit liability in the settlement. The company said it settled the case in order to avoid the expense and distraction of prolonged litigation.
