The U.S. Department of Housing and Urban Development (HUD) announced a settlement with PHH Mortgage Corp., a division of the Onity Group, regarding the alleged imposition of fees on borrowers making mortgage payments, violating Federal Housing Administration (FHA) requirements.
HUD described the settlement as “historic,” stating that it provides the largest reimbursement amount to FHA borrowers in HUD’s history.
HUD acting secretary Adrianne Todman emphasized the importance of fair access to housing and protecting families with FHA mortgage payments from unnecessary fees. The settlement marks HUD’s commitment to holding FHA mortgage companies accountable for treating borrowers fairly.
HousingWire reached out to PHH for comment but did not receive an immediate response.
The settlement does not imply fault on either side. It resolves allegations that PHH charged fees to borrowers for making mortgage payments over the phone, online, or through an interactive voice system without HUD approval.
The total payout of $3.7 million will provide restitution to approximately 51,500 borrowers for transactions between May 2021 and February 2023. Eligible borrowers will receive credit to their mortgage account or a check if they no longer have a mortgage with PHH.
The settlement aligns with the Biden administration’s efforts to address “junk fees” in the financial services industry. HUD is also pursuing reimbursement for borrowers affected by similar fees from other mortgage servicers.
The upcoming presidential inauguration may lead to changes in HUD’s regulatory priorities. Scott Turner, Trump’s nominee to lead the agency, will face a Senate confirmation hearing this week.
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