$1.5M PHH Mortgage Corporation Settlement Ends Litigation Over Allegedly Unlawful Notice Letters

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PHH Mortgage Corporation has agreed to a $1,500,000 settlement to resolve a class action lawsuit that claimed the mortgage lender sent borrowers notice of default letters supposedly containing false threats of loan acceleration and foreclosure in violation of federal and state debt collection practice laws.

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The PHH Mortgage Corporation class action settlement received preliminary court approval on February 4, 2026 and outlines that PHH will pay $500,000 into three distinct lump sum settlement funds that cover three corresponding classes of borrowers:

• -All borrowers on residential mortgage loans secured by mortgaged property in the United States whose loans were serviced by PHH, where PHH acquired the servicing rights when the loans were 30 or more days delinquent on payment obligations, and who, per PHH’s own records, were sent one or more Notices of Default between December 18, 2022 and December 15, 2025 (the “Federal Debt Collection Practices Act (FDCPA) Class”);
• -All borrowers on residential mortgage loans secured by mortgaged property in California whose loans were serviced by PHH, where PHH acquired the servicing rights when the loans were 30 or more days delinquent on payment obligations, and who, per PHH’s own records, were sent one or more Notices of Default between December 18, 2022 and December 15, 2025 (the “California Class”)
• -All borrowers on residential mortgage loans secured by mortgaged property in North Carolina whose loans were serviced by PHH, where PHH acquired the servicing rights when the loans were 30 or more days delinquent on payment obligations, and who, per PHH’s own records, were sent one or more Notices of Default between January 14, 2021 and December 15, 2025 (the “North Carolina Class”).

The settlement agreement reports that nearly 96,000 current and former homeowners are covered by the $1.5 million total deal.

The court-approved website for the PHH Mortgage settlement can be found at WilliamsPHHSettlement.com.

According to the agreement, PHH settlement class members do not need to do anything to receive payment from the applicable loan class fund(s) after the payment of all attorneys’ fees, lead plaintiff service awards and any administration costs exceeding the $200,000 that PHH has agreed to pay separately from the settlement fund.

The settlement website reports that the final amount of each class member’s individual allocation will depend on the cost of the aforementioned expenses and a number of class-member specific factors, including how behind they were on their loan at the time PHH began serving it, if their Notice of Default was sent in the relevant time period and the number of class members who ask to be excluded from the deal

The settlement website notes that PHH Mortgage class members with loan(s) that meet more than one class loan definition will receive a monetary payment from each applicable settlement fund.

Cash payments will be distributed via check to the class member’s last known mailing address, the site reports, and class members whose mailing address has changed since January 14, 2021 may update their address here. Additionally, the settlement site states that class members who prefer to receive their cash payment electronically may submit a request here.

To make any changes to their settlement payment distribution, class members will need to provide the settlement claim ID found on their received copy of the settlement notice in order to confirm their identity.

Class members who wish to object to or exclude themselves from the settlement must send a written notice to the settlement administrator stating their name, contact details and a statement explaining their decision, along with other information as explained in the settlement notice.

All exclusion requests and objections to the settlement must be submitted by May 5, 2026.

The court will determine whether to grant the PHH Mortgage settlement final approval following a hearing on June 9, 2026. Compensation will begin to be distributed to class members only after final approval has been granted and any appeals have been resolved.

The PHH Mortgage class action lawsuit claimed that the mortgage lender sent borrowers notices of default stating that their mortgage loan may be accelerated or foreclosed upon if they failed to cure the overdue amount by a certain date. The filing alleged that these letters contained false statements that PHH could not legally enforce intended to intimidate consumers into making immediate payments in violation of the Fair Debt Collection Practices Act.

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