PHH To Report Fiscal YearLoss

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MT. LAUREL, N.J. - (05/16/06) – PHH Corp., now creditunions’ largest mortgage banker, announced Monday it expectsto report a net loss for 2005 due to costs associated with itsspin-off last year from Cendant Corp. But PHH said it is stillstruggling with its accounting and is not prepared to report eitherits financials for 2005 or for the first quarter of 2006, for whichit also expects to report a loss. PHH said the accounting issuesunder review may result in material impairments to assets orrestatement of prior period financials. PHH reported in Novemberthat $280 million in spin-off related expenses pushed it into thered to the tune of $186 million for the first three quarters oflast year. With a mortgage portfolio of more than $150 billion, PHHis one of the largest mortgage lenders in the country. Yet to bereported are the details of last year’s acquisition of CUNAMutual Group’s mortgage operations, which included an $11billion servicing portfolio and business with more than 1,000credit unions.

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