Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, is calling on the Trump administration to support the Consumer Financial Protection Bureau's enforcement action against PHH Corp., which agreed Wednesday to a $45 million settlement for foreclosure abuses.
PHH, a Mount Laurel, N.J., mortgage lender and servicer, agreed to pay $31 million to consumers as part of a settlement with 49 state attorneys general. The states found that PHH violated federal law by allowing the unauthorized execution of foreclosure documents, including improperly certifying and notarizing foreclosures, often referred to as "robo-signing."
"This settlement by a bipartisan group of 49 state attorneys general is a reminder that many Americans still haven't recovered from the abuses caused by the financial crisis," Brown, D-Ohio, said in a press release "I hope the administration takes their side by vigorously pursuing the CFPB's enforcement action against PHH and nominating a CFPB director with bipartisan support that will aggressively enforce consumer laws and stand tough against special interests and big banks."
The CFPB has been locked in a contentious legal battle with PHH since 2014. An administrative law judge ruled that PHH's reinsurance agreements violated the Real Estate Settlement Procedures Act's prohibition on kickbacks in exchange for referrals, and ordered the company to disgorge more than $6 million.
Former CFPB Director Richard Cordray overruled that decision in 2015 and ordered PHH to pay $109 million, prompting the company to file a lawsuit alleging the CFPB was an unconstitutional agency.
The case, PHH Corp. v. CFPB, is on appeal to an en banc panel of the U.S. Court of Appeals for the D.C. Circuit.
The Justice Department under Attorney General Jeff Sessions reversed course from the Obama administration and sided with PHH, claiming that President Trump should have the authority to fire the head of the CFPB at will.