PHH ordered to pay homeowner $16m in fraud case

by Ryan Smith21 Jul 2014
A major mortgage servicing company has been ordered to pay a California man more than $16 million in a mortgage modification fraud case.

A Yuba County, Calif., jury awarded Phillip Linza $513,902 in compensatory damages and $15.7 million in punitive damages in the case, which dates to 2010, according to a News 10 ABC report.

Linza said that in 2010, he reached out to PHH for a loan modification, and the company agreed to reduce his payment from $2,100 per month to just over $1,500.

“I made the payments for months,” Linza told News 10. “Then I get a letter in the mail that says, ‘Oops, we made a mistake. Your payments aren’t $1,530, they’re $2,300.”

“They jacked it up, never explained why,” Linza’s attorney, Andre Chernay, told News 10. “They sent another letter demanding $7,000, never explained why.”

Linza testified in court that he made every effort to straighten things out, but only got a substantive response when he threatened to sue the company.

Linza said PHH told him, “’We’re a multibillion-dollar company. Stand in line because we’ve got a busload of attorneys that are on retainers.’”

Those attorneys didn’t end up doing the company much good. The judgment is one of the largest of its kind ever awarded in California, according to News 10.

Linza told News 10 that the verdict sends a message to the mortgage servicing industry.

“You people have been taking advantage of enough people and the country’s tired of it,” he said. “I mean, society’s tired of it.”

PHH is no stranger to legal woes. In January, the company was accused of orchestrating a massive kickback scheme. The company is also being investigated by the US Attorney’s Office for allegedly overcharging the government for foreclosure expenses on federally backed mortgages.
 

Poll

Should CFPB have more supervision over credit agencies?