UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 16, 2010
PHH CORPORATION
(Exact name of registrant as specified in its charter)
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MARYLAND
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1-7797
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52-0551284 |
(State or other jurisdiction
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(Commission File Number)
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(IRS Employer |
of incorporation)
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Identification No.) |
3000 Leadenhall Road
Mt. Laurel, New Jersey 08054
(Address of principal executive offices, including zip code)
(856) 917-1744
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
PHH Mortgage Corporation (PHH Mortgage), a wholly owned subsidiary of PHH Corporation (we, us
or the Company), has entered into a letter agreement with Fannie Mae dated December 16, 2010 (the
Committed Funding Letter Agreement). Subject to compliance with its terms and conditions and
provided no termination event has occurred pursuant to which Fannie Mae has exercised its right to
terminate the Committed Funding Letter Agreement, the Committed Funding Letter Agreement commits
Fannie Mae to accept sale and delivery and to purchase from PHH Mortgage mortgage loans and pools
of mortgage loans pursuant to Fannie Maes As Soon as Pooled (ASAP) and As Soon as Pooled
Plus (ASAP Plus) early funding programs from time to time during the term of the Committed
Funding Letter Agreement. Fannie Mae shall not be committed to purchase mortgage loans or pools of
mortgage loans from PHH Mortgage to the extent that, after giving effect to the purchase thereof,
the aggregate unpaid principal balance of mortgage loans and pools of mortgage loans considered to
be Pending (as defined in the Committed Funding Letter Agreement) under PHH Mortgages ASAP and
ASAP Plus agreements with Fannie Mae would exceed $1 billion. Subject to Fannie Maes and PHH
Mortgages early termination rights, the Committed Funding Letter Agreement is scheduled to
terminate on December 16, 2011. The incremental funding provided by the Committed Funding Letter
Agreement is in addition to the uncommitted variable-rate mortgage funding arrangements that PHH Mortgage
maintains with Fannie Mae.
The foregoing description of the Committed Funding Letter Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of Committed Funding Letter
Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K (Form 8-K) and is
incorporated herein by reference in its entirety.
As a Fannie Mae approved seller and servicer, PHH Mortgage sells a substantial portion of the
mortgage loans it originates to Fannie Mae and generally retains mortgage servicing rights in
respect of such loans. During the nine months ended September 30, 2010, 96% of the Companys
mortgage loan sales were to Fannie Mae, Freddie Mac, and loan sales to other investors guaranteed
by the Government National Mortgage Association. During the nine months ended September 30, 2010,
the Company retained mortgage servicing rights on approximately 97% of mortgage loans sold.
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Item 2.03 |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant. |
The information set forth in Item 1.01 of this Form 8-K is incorporated into this Item 2.03 by
reference.
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Item 5.02 |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers. |
Termination of Inactive Compensation-Related Plans
On December 16, 2010, the Companys Board of Directors (the Board), upon the recommendation of
the Human Capital and Compensation Committee of the Board, terminated, or in the case of the
Officer Deferred Compensation Plan (defined below) authorized and directed the termination of, the
PHH Corporation Employee Stock Purchase Plan (the ESPP), the PHH Corporation Savings Restoration
Plan (the Savings Restoration Plan), the PHH Corporation Officer Deferred Compensation Plan (the
Officer Deferred Compensation Plan), the PHH Corporation Non-Employee Directors Deferred
Compensation Plan (the Directors Deferred Compensation Plan) and the PHH Corporation Executive
Deferred Compensation Plan, as amended (the Executive Deferred Compensation Plan, and together
with the ESPP, the Savings Restoration Plan, the Directors Deferred Compensation Plan and the
Officer Deferred Compensation Plan, collectively, the Inactive Plans).
As of December 16, 2010, there were no participants or assets held in the Inactive Plans and no
payments or distributions were made in connection with the termination of the Inactive Plans. The
Inactive Plans were dormant legacy plans that were adopted prior to the Companys spin-off from
Cendant Corporation (now known as Avis Budget Group, Inc.).