When PHH reported its third quarter earnings on Tuesday, the company made several disclosures, including that it planned to exit its private-label origination business, that it planned to sell off its Ginnie Mae mortgage servicing rights portfolio, and that it was facing disciplinary action from the New York Department of Financial Services.
The company didn’t provide any details on the nature of the disciplinary action, the reason behind it, or an expected timeline, other than to say it anticipated the matter being resolved “in the fourth quarter.”
As it turned out, the wait to find out what exactly the situation with the NYDFS was proved to be exactly one day, as the NYDFS announced Wednesday that it is fining PHH $28 million for what it calls “shoddy mortgage origination and servicing practices.”
In announcing the fine, the NYDFS provided a list of the violations that PHH committed, and it reads like a laundry list of some of the same practices that gave the mortgage business a bad name before, during and after the financial crisis.
According to the NYDFS, a series of investigations uncovered “persistent shortcomings” in PHH’s mortgage origination and servicing practices, including discrepancies in how mortgage foreclosures were documented and processed.