PHH Finds More AccountingErrors

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MOUNT LAUREL, N.J. - (07/26/06) -- PHH Corp., now the largest mortgagebank for credit unions, said it has discovered more accountingproblems which will require it to restate earnings reported beforelast year's spin-off from Cendant Corp., and prevent it fromreporting its second quarter earnings on time. An internal audithas determined that the company's financial reports from 2001through Sept. 2005 cannot be relied on because of material errors,and the audit reports of Deloite & Touche LLP, the company'spublic accounting firm, may also not be relied on for thoseperiods. The company reported earlier it expects to report a lossfor fiscal 2005 and the first quarter of 2006. PHH, by virtue ofacquiring CUNA Mutual’s mortgage banking operations, nowcontrols the largest mortgage portfolio in the credit unionmovement, with almost $10 billion worth of mortgages originatedthrough credit unions, and relationships with 1,000 credit unions.The company is the country’s 11th largest mortgage bank, witha portfolio more than $140 billion.

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