Announcement - Change to EPD Policy

Effective for loans purchased on and after January 2nd, 2024, the calculation for the fee associated with an Early Payment Default (EPD) will change.  
If any of the first four payments due on a Conventional, FHA, VA or USDA mortgage following the date of purchase by PHH becomes 90 days or more delinquent, the seller shall, at PHH’s discretion, either repurchase the loan or indemnify PHH for any future losses related to the EPD. Indemnification is not an option for uninsured government loans or Conventional loans for which the investor has demanded repurchase.  
For all other loans, including non-Agency loans, a loan is considered an Early Payment Default if any of the first four payments due on a loan following the date of purchase from PHH becomes 30 days or more delinquent.  On Delegated loans, the seller will be required to repurchase the loan if there is an Early Payment Default. 

If indemnification is allowed by PHH, the seller will be required to make payment according to the below schedule: 
•    Fannie Mae and Freddie Mac Loans: $1500 + (150 bps * Purchased UPB)
•    FHA/VA/USDA Loans: $3000 + (200 bps * Purchased UPB)
•    All other Loans (e.g., non-Agency): $1500 + (100 bps * Purchased UPB) 
SRP Schedule listed above is subject to change at PHH’s discretion.  In the event these funds do not cover all losses, the seller will be invoiced for the deficiency and promptly remit payment. 

This policy will be updated in the PHH Mortgage Correspondent Lending Seller Guide. 

If you have any questions, please contact your Correspondent Specialist, Sales Executive/Correspondent Sales Representative, or contact us via the support line at 1-800-929-4744.