Exhibit 10.1


     

    Exhibit
      10.3


    
       

       

      MANAGEMENT
        SERVICES AGREEMENT

       

      THIS
        MANAGEMENT SERVICES AGREEMENT ("Services Agreement"), dated
        this 31st day of March, 2006, is entered into by and between
PHH
        HOME LOANS, LLC,
        a
        limited liability company formed under Delaware law (the "Company"), and
        PHH
        MORTGAGE CORPORATION ("PMC"),
        a corporation organized under the laws of the State of New Jersey (collectively,
        the "Parties"). 

       

      WITNESSETH:

       

      WHEREAS,
        in connection with the commencement of operations of the Company on or about
        October 1, 2005 (Launch Date), PMC began providing management services
        substantially in accordance with the terms and conditions of the form of
        Management Services Agreement identified in the AOA (defined below) as Exhibit
        B; and

       

      WHEREAS,
        the Company, PMC, and Cendant Member have conferred extensively since the
        Launch
        Date and are now prepared to formally memorialize their agreement with respect
        to the provision of these services; and 

       

      WHEREAS,
        the Board of Advisors of the Company has approved and ratified the terms
        and
        conditions of this Management Services Agreement.

       

      NOW,
        THEREFORE, in consideration of the mutual representations, warranties,
        covenants, promises and agreements set forth herein, and for other good and
        valuable consideration, the receipt and sufficiency of which are hereby
        acknowledged, the Parties hereto agree as follows:

       

      
        [***]
          INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
          HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
          AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT
          OF 1934,
          AS AMENDED.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      1.  Capitalized
        Terms.
        Capitalized terms not otherwise defined in this Services Agreement shall
        have
        the meaning described in the Strategic Relationship Agreement, dated as of
        January 31, 2005 (the “SRA”), or the Amended and Restated Limited Liability
        Company Operating Agreement, also dated as of January 31, 2005, as amended
        on
        May 12, 2005 (“AOA”), as the case may be.

       

      2.  Representations
        and Warranties of Company.
        The
        Company represents and warrants to PMC that:

       

      (a)  It
        is
        duly organized and existing, and in good standing, pursuant to the laws of
        the
        State of Delaware;

       

      (b)  It
        has
        the requisite limited liability company authority to enter into this Services
        Agreement and to perform its obligations hereunder; and

       

      (c)  The
        terms
        and conditions of this Services Agreement do not violate any provision of
        its
        Certificate of Formation, Operating Agreement or any other agreement to which
        it
        is a party.

       

      3.  Representations
        and Warranties of PMC.
        PMC
        represents and warrants to the Company that:

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (a)  It
        is
        duly organized and existing, and in good standing, pursuant to the laws of
        the
        State of New Jersey;

       

      (b)  It
        has
        the requisite corporate authority to enter into this Services Agreement and
        to
        perform its obligations hereunder; and

       

      (c)  The
        terms
        and conditions of this Services Agreement do not violate any provision of
        its
        Articles of Incorporation, Bylaws or any other agreement to which it is a
        party.

       

      4.  Capacity
        Services.
        PMC may
        provide to the Company or the Company may provide to PMC the capacity services
        described in Exhibit
        4.1
        attached
        hereto, on and pursuant to the terms set forth therein. In consideration
        for
        performing the services described in Exhibit
        4.1
        hereto,
        the Company shall pay to PMC or PMC shall pay to the Company a cash fee
        calculated and payable in the manner set forth in Exhibit
        4.1.

       

      5.  Product
        Support Services.
        PMC
        shall provide to the Company the product support services described in
Exhibit
        5.1
        attached
        hereto, on and pursuant to the terms set forth therein. In consideration
        for
        performing the services described in Exhibit
        5.1
        hereto,
        the Company shall pay to PMC monthly, a cash fee calculated as set forth
        in
Exhibit
        5.1.

       

      6.  General
        Administrative Services.
        PMC
        shall provide to the Company the general administrative services described
        in
Exhibit
        6.1
        attached
        hereto, on and pursuant to the terms set forth therein. In consideration
        for
        performing the services described in Exhibit
        6.1
        hereto,
        the Company shall pay to PMC the cash fee or cash fees calculated and payable
        in
        the manner set forth in Exhibit
        6.1.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      7.  IT
        Administrative Services.
        PMC
        shall provide to the Company the IT administrative services described in
        Exhibit
        7.1
        attached
        hereto, on and pursuant to the terms set forth therein. In consideration
        for
        performing the services described in Exhibit
        7.1
        hereto,
        the Company shall pay to PMC monthly, a cash fee calculated as set forth
        in
Exhibit
        7.1.

       

      8.  Required
        Disclosures.
        The
        amount, payor and payee of the fees incurred in connection with the product
        support services pursuant to Exhibit
        5.1
        shall be
        described in the Mortgage Loan Disclosures, to the extent required by
        law.

       

      9.  Standard
        of Care.
        PMC
        shall perform the services provided pursuant to this Services Agreement with
        no
        less degree of care than PMC or any of its Affiliates exercises in providing
        such services for its own account or the account of any third party with
        a
        similar regulatory profile, provided,
        that in
        no event shall PMC exercise a lesser degree of care than that exercised by
        PMC
        prior to the date of the SRA.

       

      10.  Compliance
        with Laws.
        Actions
        taken or not taken by PMC and its Affiliates, and all communications made
        when
        performing its obligations under this Services Agreement shall comply in
        all
        material respects with the requirements of all applicable laws.  PMC
        shall
        promptly inform the Company in writing of any notices, inquiries or other
        communications, written or oral, received by PMC or any Affiliate thereof
        with
        respect to any material legal, administrative, arbitral or other proceedings,
        claims, actions or governmental or regulatory investigations or findings
        with
        respect to any of the services provided pursuant to this Services
        Agreement.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      11.  Records
        Preservation and Retention.

       

      (a)  PMC
        acknowledges that all Mortgage Loan Documents are the property of the Company.
        PMC shall use its reasonable best efforts to safeguard the Mortgage Loan
        Documents that it may hold or retain. PMC may enter into an arrangement with
        a
        third party agent to maintain the Mortgage Loan Documents with the reasonable
        consent of the Company.

       

      (b)  PMC
        agrees that it or its agent will hold and be responsible for such Mortgage
        Loan
        Documents within a secure and controlled environment to include, but not
        be
        limited to, fireproof vaults. PMC agrees that it or its agent will use its
        reasonable best efforts to protect such Mortgage Loan Documents from destruction
        or loss and from the unauthorized divulgence of confidential information.
        PMC
        shall, if such Mortgage Loan Documents are lost or destroyed, replace such
        Mortgage Loan Documents in all necessary respects. Further, such Mortgage
        Loan
        Documents will be maintained under such conditions as to have them readily
        available for use and examination by the Company, upon its reasonable request
        therefor.

       

      (c)  Upon
        request by the Company, PMC will forward any and all of the Company's records
        and the Company Mortgage Loan Documents in its possession that the Company
        reasonably may seek.

       

      (d)  PMC
        shall
        maintain all such Mortgage Loan Documents and other records relating to the
        services provided by it hereunder in accordance with all applicable federal,
        state and local laws and regulations, as well as Mortgage Loan investor and
        insurer requirements and reasonable Company requirements, as provided to
        PMC.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.  Right
        to Audit.
        The
        Company and its officers, employees and agents, including third party attorneys
        and accountants and auditors shall have full and complete access to PMC's
        records and operations at reasonable times to monitor PMC's performance on
        behalf of the Company pursuant to this Services Agreement, and all audit,
        inspection and review rights that the Cendant Member has with respect to
        the
        Company as provided in the Operating Agreement.

       

      13.  Termination.
        This
        Services Agreement shall terminate automatically upon the effective date
        of any
        termination of the SRA in accordance with its terms; provided
        that
        such termination shall have no effect on the Parties' obligations with respect
        to Mortgage Loans in the process of origination at the time of such termination;
        and further
        provided
        that the
        representations, warranties and covenants of the Parties contained herein
        and
        the respective obligations of each Party hereunder to indemnify and hold
        harmless the other Party set forth in Section 14 below shall survive the
        termination of this Services Agreement (i) for a period of one (1) year
        thereafter, in the event of a Cendant Put, a Two Year Put, a Purchase Right
        transaction, a Special Termination Put or a Non-Renewal Put, or (ii) for
        a
        period of five (5) years thereafter, in the event of a PHH Sale, a Two Year
        PHH
        Sale or a Non-Renewal PHH Sale. In connection with any termination contemplated
        by clause (ii) above, PMC shall deliver to the Company, at the effective
        time of
        such termination, any records in its possession as contemplated by Section
        11
        hereof.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      14.  Indemnification.

       

      (a)  PMC
        shall
        indemnify, hold harmless and defend the Company, its members, directors,
        officers and employees and its successors and assigns and their members,
        directors, officers and employees, with counsel approved by the Company,
        from
        and against any and all Losses which the Company or any such parties may
        incur
        or be subject to arising out of, relating to, or in connection with (i) any
        representation of PMC that was not true when made, (ii) any breach by PMC
        of its
        warranties or covenants or the terms and conditions of this Services Agreement,
        or (iii) any actions or failures to act by PMC or any of its Affiliates in
        connection with the services provided pursuant to this Services Agreement
        that
        constitute negligence, bad faith or willful misconduct. PMC's obligation
        to so
        indemnify, hold harmless and defend the Company and any such parties shall
        survive termination of this Services Agreement in accordance with Section
        14.
        The Company's right to indemnification, as provided herein, shall be in addition
        to, and not in lieu of all other rights and remedies it may have under
        law.

       

      (b)  The
        Company shall indemnify, hold harmless and defend PMC, its directors, officers
        and employees and its successors and assigns and their directors, officers
        and
        employees, with counsel approved by PMC, from and against any and all Losses
        which PMC or any such parties may incur or be subject to arising out of,
        relating to or in connection with any representation made by the Company
        that
        was not true when made or any breach by the Company of its warranties or
        covenants or the terms and conditions of this Services Agreement. The Company's
        obligation to so indemnify, hold harmless and defend PMC and any such parties
        shall survive termination of this Services Agreement in accordance with Section
        14. PMC's right to indemnification, as provided herein, shall be in addition
        to,
        and not in lieu of, all other rights and remedies it may have under
        law.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      15.  Cooperation.
        The
        Parties acknowledge that the success of their efforts under this Services
        Agreement depends on the cooperation of each of them. Accordingly, each of
        the
        Parties shall use its best efforts and confer in good faith in an attempt
        to
        agree upon any matter hereunder which requires such agreement.

       

      16.  No
        Partnership.
        This
        Services Agreement is not intended to be, nor shall it be construed to be,
        the
        formation of a partnership or joint venture between the Parties.

       

      17.  Notices.
        All
        notices and statements to be given under this Services Agreement are to be
        in
        writing, delivered by hand, facsimile, overnight mail or similar service,
        or
        first class United States mail, postage prepaid and registered or certified
        with
        return receipt requested, to the following addresses or facsimile numbers,
        as
        applicable (which addresses and facsimile numbers may be revised by written
        notice):

       

      The
        Company:

          

          PHH
        Home
        Loans, LLC

          3000
        Leadenhall Road

          Mt.
        Laurel,
        NJ 08054

       

          Attention:
        President

       

          Facsimile:
        

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

          With
        a copy
        to:

       

          Cendant
        Real
        Estate Services Venture Partner, Inc.    

          1
        Campus
        Drive

          Parsippany,
        NJ 07054

          Attention:
        Eric Bock

          

          Facsimile:

       

       PMC:

       

          PHH
        Mortgage
        Corporation    

          3000
        Leadenhall Road

          Mt.
        Laurel,
        NJ 08054

       

          Attention:
        President

          Facsimile:
        856-917-6016

       

      All
        written notices and statements shall be deemed given, delivered, received
        and
        effective upon personal delivery or receipt of facsimile or telegram, one
        (1)
        calendar day after sending by overnight mail or any similar service or five
        (5)
        calendar days after mailing by first class United States mail in the manner
        set
        forth above.

       

      18.  Expenses
        and Payment Terms.
        PMC
        shall receive no compensation under the terms of this Services Agreement
        except
        as expressly provided herein. The Company shall, at its sole cost and expense,
        employ all persons necessary for it to carry out its duties and responsibilities
        hereunder. All costs and expenses incurred by either Party in connection
        herewith (including salaries for their respective personnel and their respective
        legal fees and expenses) shall be solely the expenses of the Party incurring
        them. Neither Party shall be obligated to contribute any amount as capital
        or
        otherwise to the other. Monthly fees payable hereunder shall be billed by
        the
        fifteenth (15th)
        of the
        month following the date services were provided and shall be due and payable
        by
        the last day of such month.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      19.  Amendment.
        This
        Services Agreement may be amended and any provision hereof waived, but only
        in
        writing signed by the Party against whom such amendment or waiver is sought
        to
        be enforced; provided,
        however,
        that
        any action taken by the Company pursuant to this Section 19 shall be valid
        only
        if taken following receipt of the prior approval of the Company's Board of
        Advisors (as defined in the Operating Agreement) in accordance with Section
        6.3
        of the Operating Agreement.

       

      20.  Governing
        Law.
        THIS
        SERVICES AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
        STATE
        OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAWS RULES THEREOF, AND THE
        OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
        IN
        ACCORDANCE WITH SUCH LAWS.
        Any
        legal suit, action or proceeding against any of the Parties hereto arising
        out
        of or relating to this Services Agreement shall only be instituted in any
        federal or state court in New York, New York, pursuant to Section 5-1402
        of the
        New York General Obligations Law, and each Party hereby irrevocably submits
        to
        the exclusive jurisdiction of any such court in any such suit, action or
        proceeding. The Parties hereby agree to venue in such courts and hereby waive,
        to the fullest extent permitted by law, any claim that any such action or
        proceeding was brought in an inconvenient forum. Each of the Parties hereby
        irrevocably waives all right to trial by jury in any action, proceeding or
        counterclaim arising out of or relating to this Services Agreement.

       

      21.  Dispute
        Resolution.
        In the
        event of any disputes under this Services Agreement, resolution shall occur
        pursuant to the dispute resolution procedures contained in Section 13.11
        of the
        SRA as if such provision applied to the Parties hereto.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      22.  Severability;
        Release.
        The
        Parties hereto shall not perform, or be expected to perform, any act hereunder
        that is, or is reasonably believed to be, in violation of any applicable
        state
        or federal rule or regulation. If any provision of this Services Agreement
        is
        now or later in violation of any local, state or federal law, then such
        provision shall be considered null and void for purposes of this Services
        Agreement with all other provisions remaining in full force and effect. Each
        Party expressly releases the other from any liability in the event either
        of
        said Parties cannot fulfill any obligation hereunder due to any prohibition
        under local, state or federal laws pertaining to such obligation; provided,
        that
        the Parties agree to work together to structure an alternative solution for
        addressing the provisions so found to be in violation.

       

      23.  Further
        Assurances.
        The
        Parties agree that each will, from time to time, execute, acknowledge and
        deliver, or cause to be executed, acknowledged and delivered, such amendments
        and supplements hereto and such further instruments as may be reasonably
        required or appropriate to further express the intention of the Parties,
        or to
        facilitate the performance of this Services Agreement.

       

      24.  Section
        Headings.
        The
        headings of the various sections of this Services Agreement have been inserted
        for convenience of reference only and shall not be deemed to be a part of
        this
        Services Agreement.

       

      25.  Assignment.
        PMC may
        not assign this Services Agreement or any of its rights or obligations hereunder
        without the prior express written consent of the Company. The Company may
        not
        assign this Services Agreement or any of its rights or obligations hereunder
        without the prior approval of the Company's Board of Advisors (as defined
        in the
        Operating Agreement) in accordance with Section 6.3 of the Operating
        Agreement.

       


      
        
           

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, each of the undersigned Parties has caused this Services
        Agreement to be duly executed and delivered by one of its duly authorized
        officers, all as of the date hereof.

       

      
        	
                PHH
                  HOME LOANS, LLC

              	
                PHH
                  MORTGAGE CORPORATION

              
	
                By: /s/
                  Terence W. Edwards

              	
                By:
                  /s/ Terence W. Edwards

              
	
                Name:
                  Terence W. Edwards

              	
                Name:
                  Terence W. Edwards

              
	
                Title:
                   President
                  and Chief Executive Officer

              	
                Title:
                   President
                  and Chief Executive Officer

              


      

      


      


      


      
 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    


    EXHIBIT
      4.1

    


    Capacity
      Services

    


    


    Services:

    


    Capacity
      services include the following services provided by PMC to the Company and/or
      services provided by the Company to PMC: 

    


    
      	·  	
              Capacity
                services for Net One Tele-services
                -
                includes phone consultants and additional staff for Loan Processing
                Center
                - additional staffing will be through PMC
                employees.

            


    

     

    
      	·  	
              Description
                of services
                -
                1) weekend coverage to PMC from the Company or to the Company from
                PMC; 2)
                coverage for the corporate relocation business processed by the Company
                on
                behalf of PMC for non-Cendant Mobility driven business; 3) foreign
                language support; and 4) excess capacity
                support.

            


    

     

    


    Fees1 :

    


    
      	·  	
              The
                fee for Net One Tele-services support will be [***] per lead paid
                monthly.

            


    

     

    
      	·  	
              The
                fee for loan processing support will be [***] per application paid
                monthly.

            


    

     

      
        

      

    

    1  Effective as of Launch Date

     

    
      [***]
        INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
        HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
        AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT OF
        1934,
        AS AMENDED.

 

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      5.1

    


    Product
      Support Services

    


    


    Services:

    


    Product
      Support consists of the following services provided by PMC to the Company (not
      including the Small Corps and whether or not the Company incurs these costs
      or
      similar costs directly):

    


    
      	·  	
              Loan
                control and completion
                (LCC) - post-closing functions here include reconciling the HUD1
                received
                from closing agents to the cash dispersed on the loan reconciling
                the tax
                and insurance escrows if appropriate, the submissions for insurance
                with
                HUD for GNMA insured loans and loan pools, certain compliance monitoring
                activities, verification of recorded deeds and title insurance policies
                etc.

            


    

     

    
      	·  	
              Pricing
                -
                functions here include establishing the rate and fees for the borrowers
                established at the time of the rate lock commitment based on then
                current
                market conditions and profit expectations, performance of competitive
                surveys and market data gathering efforts to verify the competitiveness
                of
                pricing, determination of price concessions and implementation of
                concession policies etc.

            


    

     

    
      	·  	
              Loan
                sales
                -
                functions here include the aggregation of loans into pools based
                on
                appropriate characteristics, determination of best execution decisions,
                gathering loans files, performance of due diligences, and shipping
                of
                files, management of GSE agency and mortgage loan investor relationships
                etc.

            


    

     

    
      	·  	
              Product
                development
                -
                functions include development of loan program parameters, program
                design
                to comply with investor requirements, design integration of new programs
                to company processes, communication of new programs and related
                requirements etc.

            


    

     

    
      	·  	
              Credit
                risk management
                -
                includes providing access to PMC's automated underwriting systems,
                monitoring of loan quality, monitoring of compliance with documentation
                standards, monitoring performance of loans to assess underwriting
                and
                pricing effectiveness etc.

            


    

     

    
      	·  	
              Mail
                print center
                -
                includes collection and copying of documents in connection with processing
                of the Company's loan applications and loan closing
                packages.

            


    

     

    
      	·  	
              Operational
                strategy department
                -
                includes development, processing and reporting on client survey results,
                office of the president for customer satisfaction and recovery,
                etc.

            


    

     

    
      	·  	
              Document
                Review Center
                -
                includes the cost of finalizing loan processing and preparation of
                closing
                documents.

            


    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Fees:

    


    Fees
      will
      be based on the fair value of services provided, based on actual costs incurred
      by PMC plus a profit margin of [***]. On or before January 1 of each year,
      PMC
      will provide the Company with a forecast of estimated per loan costs, inclusive
      of profit margin, for Production Support Services (Forecast Fees) for the
      upcoming calendar year. Forecast Fees for the services will be billed on a
      monthly basis. During the last month of each calendar quarter, PMC will analyze
      Forecast Fees billed for the calendar year to date, inclusive of profit margin,
      compare those fees to the actual costs incurred by PMC for the calendar year
      to
      date plus remainder of year forecast (Current Forecast Costs), and reconcile
      the
      two. In the event the Forecast Fees billed are greater than the Current Forecast
      Costs, [***]. In the event Current Forecast Costs are greater than Forecast
      Fees
      billed, [***]. Appropriate adjustments will be made to the Forecast Fees on
      a
      going forward basis based on the results of this analysis. [***].

     

    For
      every
      year after 2006, the annual per loan Production Support Services fees to be
      charged shall not exceed the 2006 levels adjusted upward by the greater of
      three
      percent (3%) annualized or the cumulative change in Consumer Price Index (CPI)
      from 2006 to the calendar year being evaluated without the written consent
      of
      the PHH Home Loans Board of Advisors.

    


    Forecast
      and Actual Fees for 20051 and
      Forecast Fees for 2006 for Production Support Services will be as
      follows:

    


    Production
      Support Fees

    


    
      	 	
              Forecast

            	
              Actual

            	
              Forecast
                2006 

            
	 	
              2005
                Fees

            	
              2005
                Fees

            	
              Fees
                

            
	 	
              ($
                per loan) 

            	($ per loan)
	($ per
              loan)
	 	 	 	 
	
              Fees
                for Total loans

            	
              [***]

            	 	 
	
              Fees
                for First Mortgage Loans

            	 	
              [***]

            	
              [***]

            
	
              Fees
                for Piggy-Back Second

            	 	
              [***]

            	
              [***]

            
	
              Mortgages

            	 	 	 


    

     

     

      
        

      

    

    1  Effective as of Launch Date

     

    
      [***]
        INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
        HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
        AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT OF
        1934,
        AS AMENDED.

    

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      6.1

    


    General
      Administrative Services

    


    


    Services:

    


    General
      Administrative (non-IT) services include the following services provided by
      PMC
      to the Company (including the Small Corps and whether or not the Company incurs
      these costs or similar costs directly):

    


    
      	·  	
              Accounting
                and Finance
                -
                includes maintenance of the general ledger and related sub ledgers,
                preparation of financial reports and management reports, preparation
                of
                financial forecasts, staffing models, profitability models, payment
                of
                bills, funding of loans, establishment of controls, controls monitoring,
                determination of sales proceeds,
                etc.

            


    

     

    
      	·  	
              Telecom
                -
                includes the cost of telephone systems, staffing for maintenance
                and call
                prioritization systems, etc (including the PIMI
                systems)

            


    

     

    
      	·  	
              Business
                intelligence
                -
                includes development and scheduling of management reporting and client
                reporting systems, reporting data management
                etc.

            


    

     

    
      	·  	
              Legal
                -
                includes consulting on legal matters
                etc.

            


    

     

    
      	·  	
              Human
                resources
                -
                includes payroll processing or related management, benefits management
                and
                participation in benefit plans, hiring-related matters, training-related
                matters, etc

            


    

     

    
      	·  	
              Public
                relations
                -
                includes event management services, press related matters,
                etc.

            


    

     

    
      	·  	
              Administration
                -
                Vendor management, etc

            


    

     

    
      	·  	
              Facilities
                -
                includes building management, landscaping management, heating, air
                conditioning, power, growth management,
                etc.

            


    

     

    
      	·  	
              Training
                -
                development and delivery of training materials
                etc.

            


    

     

    
      	·  	
              Executive
                -
                includes an allocation of PHH Corporation executive management and
                corporate structure, PHH Mortgage executive management and structure,
                a
                portion of Management incentive programs to the extent not allocated
                to
                specific functions, etc

            


    

     

    


    Fees:

    


    Fees
      will
      be charged based on a per loan basis, subject to a fixed minimum annual dollar
      amount. Both the per-loan and annual minimum fees will adjust upward on the
      first day of each calendar year at a maximum of 3%. The minimum annual payment
      will be determined by PHH Member on a calendar year basis on or before December
      31st
      of each
      calendar year. Reconciliation of (i) Forecast 2005 Fees billed versus Actual
      2005 Fees incurred for 2005 and (ii) Forecast 2005 Fees billed in January and
      February 2006 versus Stated 2006 Fees for the first quarter of 2006 for General
      Administrative Services will take place no later than March 31,
      2006.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Forecast
      and Actual Fees for 20051 and
      Stated Fees for 2006 for General Administrative Services are as
      follows:

    


    General
      Administrative Services Fees

    


    
      	 	
              Forecast

            	
              Actual

            	
              Stated

            
	 	
              2005
                Fees

            	
              2005
                Fees

            	
              2006
                Fees

            
	 	
              ($)

            	
              ($)

            	
              ($)

            
	 	 	 	 
	
              Fees
                for Total Loans2 

            	
              [***]

            	 	 
	 	 	 	 
	
              Fees
                for First Mortgage Loans2

            	 	
              [***]

            	
              [***]

            
	 	 	 	 
	
              Fees
                for Piggy-Back Second Mortgages2

            	 	
              
                [***]

              

            	
              [***]

            
	 	 	 	 
	
              Minimum
                Calendar Year Fees

            	
              [***]

            	
              [***]

            	
              [***]

            


    

     

    Once
      every two years PMC will prepare a schedule of at least three alternatives
      for
      the fixed and variable components of the General Administrative Services fees.
      Within thirty (30) days of receipt of the schedule, Cendant Member will notify
      PMC of its selection of fee structures for the following two year period. Fees
      set forth above reflect the low volume option chosen by Cendant Member for
      2005
      and 2006.

     

      
        

      

    

    1 
      Effective as of Launch Date

     

    2 Fees
      are per loan fees

    

      [***]
        INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
        HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
        AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT OF
        1934,
        AS AMENDED.



    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      7.1

    


    IT
      Administrative Services

    


    


    Services:

    


    
      	·  	
              IT
                Administrative Services to the Company, including the Small Corps,
                include
                the following:

            


    

    
      	o  	
              systems
                operations

            


    

    
      	o  	
              maintenance
                of production systems

            


    

    
      	o  	
              help
                desk support

            


    

    
      	o  	
              network
                support

            


    

    
      	o  	
              development
                of enhancements

            


    

    
      	o  	
              systems
                interoperability

            


    

    
      	o  	
              maintenance
                of websites

            


    

    
      	o  	
              systems
                security

            


    

    
      	o  	
              systems
                management reporting

            


    

    
      	o  	
              data
                management

            


    

    
      	o  	
              IT
                vendor management

            


    

    
      	o  	
              project
                evaluation and management

            


    

    
      	o  	
              resource
                allocations

            


    

    
      	o  	
              telecom
                systems and support

            


    

    
      	o  	
              new
                systems integration

            


    

    
      	o  	
              major
                systems development

            


    

    
      	o  	
              systems
                controls

            


    

    


    Fees:

    


    Fees
      will
      be charged based on a per loan basis, subject to a fixed minimum annual dollar
      amount. Both the per loan fees and the annual minimum fees will adjust upward
      on
      the first day of each calendar year (Reset) by the greater of (i) 3% or (ii)
      the
      increase in the Consumer Price Index rate for the October to October period
      immediately preceding the Reset. The minimum annual payment will be determined
      by the PHH member on a calendar year basis on or before December 31st
      of each
      calendar year. Reconciliation of (i) Forecast 2005 Fees billed versus Actual
      2005 Fees incurred for 2005 and (ii) Forecast 2005 Fees billed versus Stated
      2006 Fees for the first quarter of 2006 for IT Administrative Services will
      take
      place no later than March 31, 2006.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Forecast
      and Actual Fees for 20051 and
      Stated Fees for 2006 for IT Administrative Services are as follows:

     

    IT
      Administrative Fees

    


    
      	 	
              Forecast
                

            	
              Actual

            	
              Stated

            
	 	
              2005
                Fees

            	
              2005
                Fees

            	
              2006
                Fees

            
	 	
              ($)

            	
              ($)
                

            	
              ($)

            
	 	 	 	 
	
              Fees
                for Total Loans 1

            	
              [***]

            	 	 
	 	 	 	 
	
              Fees
                for First Mortgage Loans2

            	 	
              [***]

            	
              [***]

            
	 	 	 	 
	
              Fees
                for Piggy-Back Second 

            	 	 	 
	
              Mortgages1

            	 	
              [***]

            	
              [***]

            
	 	 	 	 
	
              Minimum
                Calendar Year Fees

            	
              [***]

            	
              [***]

            	
              [***]

            


    

     

    Once
      every two years PMC will prepare a schedule of at least three alternatives
      for
      the fixed and variable components of the IT Administrative Services Fees. Within
      thirty (30) days of receipt of the schedule, Cendant Member will notify PMC
      of
      its selection of fee structures for the following two year period. Fees set
      forth above reflect the low volume chosen by Cendant Member for 2005 and
      2006.

    


    
      
        

      

      
        1 Effective
          as of Launch Date

         

        2 Fees
          are per loan fees

        

          [***]
            INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
            HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
            SECURITIES
            AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT
            OF 1934,
            AS AMENDED.