##### Table of Contents





UNITED
    STATES SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549
     Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,
    2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from
    to   Commission File
    No. 1-7797
      PHH CORPORATION
 (Exact name of registrant as
    specified in its charter)
  MARYLAND

52-0551284(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)3000 LEADENHALL ROAD

08054MT. LAUREL, NEW JERSEY

(Zip Code)(Address of principal executive
    offices)   856-917-1744
 (Registrants telephone
    number, including area code)
      SECURITIES
    REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
  NAME OF EACH EXCHANGETITLE OF EACH CLASS

ON WHICH REGISTEREDCommon Stock, par value $0.01 per share

The New York Stock ExchangePreference Stock Purchase Rights

The New York Stock Exchange   SECURITIES
    REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
  None
      þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  þ o o  o
  Rule 12b-2 o þ




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##### 





TABLE OF
    CONTENTS
   
  Item

Description

PageCautionary Note Regarding Forward-Looking
    Statements


2PART I1


Business


51A


Risk Factors


171B


Unresolved Staff Comments


322


Properties


323


Legal Proceedings


324


Reserved


33PART II5


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


336


Selected Financial Data


347


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


357A


Quantitative and Qualitative Disclosures About
    Market Risk


848


Financial Statements and Supplementary Data


899


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


1639A


Controls and Procedures


163Report of Independent Registered Public
    Accounting Firm


1649B


Other Information


165PART III10


Directors, Executive Officers and Corporate
    Governance


16511


Executive Compensation


16712


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


16713


Certain Relationships and Related Transactions,
    and Director Independence


16714


Principal Accounting Fees and Services


167PART IV15


Exhibits and Financial Statement Schedules


167Signatures


168Exhibit Index


169EX-4.8EX-4.8.1EX-10.15EX-10.15.1EX-10.15.2EX-12EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2   1




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Except as expressly indicated or unless the context otherwise
    requires, the Company, PHH,
    we, our or us means PHH
    Corporation, a Maryland corporation, and its subsidiaries.
 CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS  Form 10-K Form 10-K)
  Form 10-K
 2




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Form 10-K
  §
    the effects of environmental, economic or political conditions
    on the international, national or regional economy, the outbreak
    or escalation of hostilities or terrorist attacks and the impact
    thereof on our businesses;§
    the effects of continued market volatility or continued economic
    decline on the availability and cost of our financing
    arrangements, the value of our assets and the price of our
    Common stock;§
    the effects of a continued decline in the volume or value of
    U.S. home sales and home prices, due to adverse economic
    changes or otherwise, on our Mortgage Production and Mortgage
    Servicing segments;§
    the effects of changes in current interest rates on our business
    and our financing costs;§
    our decisions regarding the use of derivatives related to
    mortgage servicing rights (MSRs), if any, and the
    resulting potential volatility of the results of operations of
    our Mortgage Servicing segment;§
    the effects of increases in our actual and projected repurchases
    of, indemnification given in respect of, or related losses
    associated with, sold mortgage loans for which we have provided
    representations and warranties or other contractual recourse to
    purchasers and insurers of such loans, including increases in
    our loss severity and reserves associated with such loans;§
    the effects of reinsurance claims in excess of projected levels
    and in excess of reinsurance premiums we are entitled to receive
    or amounts currently held in trust to pay such claims;§
    the effects of any significant adverse changes in the
    underwriting criteria of government-sponsored entities,
    including the Federal National Mortgage Association
    (Fannie Mae) and the Federal Home Loan Mortgage
    Corporation (Freddie Mac);§
    the effects of the insolvency of any of the counterparties to
    our significant customer contracts or financing arrangements or
    the inability or unwillingness of such counterparties to perform
    their respective obligations under such contracts;§
    the ability to develop and implement operational, technological
    and financial systems to manage our operations and to achieve
    enhanced earnings or effect cost savings;§
    the effects of competition in our existing and potential future
    lines of business, including the impact of consolidation within
    the industries in which we operate and competitors with greater
    financial resources and broader product lines;§
    the effects of the decline in the results of operations or
    financial condition of automobile manufacturers
    and/or their
    willingness or ability to make new vehicles available to us on
    commercially favorable terms, if at all;§
    the ability to quickly reduce overhead and infrastructure costs
    in response to a reduction in revenue;§
    the ability to implement fully integrated disaster recovery
    technology solutions in the event of a disaster;§
    the ability to obtain financing on acceptable terms, if at all,
    to finance our operations or growth strategy, to operate within
    the limitations imposed by our financing arrangements and to
    maintain the amount of cash required to service our indebtedness;§
    the ability to maintain our relationships with our existing
    clients;§
    a deterioration in the performance of assets held as collateral
    for secured borrowings;§
    the impact of the failure to maintain our credit ratings; 3




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§
    any failure to comply with certain financial covenants under our
    financing arrangements;§
    the effects of the declining health of the U.S. and global
    banking systems, the consolidation of financial institutions and
    the related impact on the availability of credit;§
    the impact of the Emergency Economic Stabilization Act of 2008
    (the EESA) enacted by the U.S. government on
    the securities markets and valuations of mortgage-backed
    securities (MBS);§
    the impact of actions taken or to be taken by the Treasury and
    the Federal Reserve Bank on the credit markets and the
    U.S. economy;§
    the impact of the adverse conditions in the North American
    automotive industry and§
    changes in laws and regulations, including changes in accounting
    standards, mortgage- and real estate-related regulations and
    state, federal and foreign tax laws.     4




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PART I  Item 1.
    Business  History
    Overview
          Available
    Information
  (856) 917-1744. Form 10-K.
  1-800-SEC-0330.
 5




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OUR
    BUSINESS
    Year Ended December 31,2009


2008


2007Mortgage Production


34
%


22
%


9
%Mortgage
    Servicing(1)


3
%


(13
)%


8
%Combined Mortgage Services Segments


37
%


9
%


17
%Fleet Management Services


63
%


89
%


83
%Other(2)






2
%


     (1)
    
    As a result of unfavorable
    Valuation adjustments related to mortgage servicing rights, net,
    our Mortgage Servicing segment generated negative net revenues
    for the year ended December 31, 2008.(2)
    
    Represents certain income and
    expenses not allocated to the three reportable segments,
    primarily related to a terminated merger agreement with General
    Electric Capital Corporation, for the year ended
    December 31, 2008.  Mortgage
    Services
   6




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Form 10-K)
  Year Ended and As of December 31,2009


2008(1)(2)(3)


2007(In millions)Net Revenues:Mortgage Production

$
880


$
462


$
205Mortgage Servicing


82



(276
)


176Combined Mortgage Services Segments

$
962


$
186


$
381Segment Profit (Loss):Mortgage Production

$
306


$
(90
)

$
(226
)Mortgage Servicing


(85
)


(430
)


75Combined Mortgage Services Segments

$
221


$
(520
)

$
(151
)Assets:Mortgage Production

$
1,464


$
1,228


$
1,840Mortgage Servicing


2,269



2,056



2,498Combined Mortgage Services Segments

$
3,733


$
3,284


$
4,338     (1)
    
    The Mortgage Servicing segment
    generated negative Net revenues for 2008 primarily due to a net
    loss on MSR risk management activities of $466 million.(2)
    
    See
    Part IIItem 7. Managements
    Discussion and Analysis of Financial Condition and Results of
    OperationsResults of Operations2008 vs
    2007Segment ResultsMortgage Production Segment
    for a discussion regarding fair value accounting principles
    adopted on January 1, 2008, which impact the comparability
    of 2007 results to subsequent periods.(3)
    
    During 2008, we recorded a non-cash
    Goodwill impairment of $61 million related to the PHH Home
    Loans reporting unit. Net loss attributable to noncontrolling
    interest for 2008 was impacted by $30 million as a result
    of the Goodwill impairment. Segment loss for 2008 was impacted
    by $31 million as a result of the Goodwill impairment.  Mortgage
    Production Segment
  Inside
    Mortgage Finance
    §
    Financial Institutions Channel:  We are
    a leading provider of private-label mortgage loan originations
    for financial institutions and other entities throughout the
    U.S. In this channel, we offer a complete 7




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outsourcing solution, from processing applications through
    funding for clients that wish to offer mortgage services to
    their customers, but are not equipped to handle all aspects of
    the process cost-effectively. Representative clients include
    Merrill Lynch Credit Corporation (Merrill Lynch) and
    Charles Schwab Bank (Charles Schwab), which
    represented approximately 16% and 15% of our mortgage loan
    originations for the year ended December 31, 2009,
    respectively.  §
    Real Estate Brokers Channel:  We work
    with real estate brokers to provide their customers with
    mortgage loans. Through our affiliations with real estate
    brokers, we have access to home buyers at the time of purchase.
    In this channel, we work with brokers associated with NRT
    Incorporated, Realogys owned real estate brokerage
    business (together with its subsidiaries, NRT),
    brokers associated with Realogys franchised brokerages
    (Realogy Franchisees) and brokers that are not
    affiliated with Realogy (Third-Party Brokers).
    Realogy has agreed that the residential and commercial real
    estate brokerage business owned and operated by NRT and the
    title and settlement services business owned and operated by
    Title Resource Group LLC (together with its subsidiaries,
    TRG) will exclusively recommend the Mortgage Venture
    as provider of mortgage loans to: (i) the independent sales
    associates affiliated with Realogy Services Group LLC and
    Realogy Venture Partner (together with Realogy Services Group
    LLC and their respective subsidiaries, the Realogy
    Entities), excluding the independent sales associates of
    any Realogy Franchisee acting in such capacity and (ii) all
    customers of the Realogy Entities (excluding Realogy Franchisees
    or any employee or independent sales associate thereof acting in
    such capacity). In general, our capture rate of mortgage loans
    where we are the exclusive recommended provider is much higher
    than in other situations. Realogy Franchisees, including
    Coldwell Banker Real Estate Corporation, Century 21 Real Estate
    LLC, ERA Franchise Systems, Inc. and Sothebys
    International Affiliates, Inc. have agreed to recommend
    exclusively PHH Mortgage as provider of mortgage loans to their
    respective independent sales associates. Additionally, for
    Realogy Franchisees and Third-Party Brokers, we endeavor to
    enter into separate marketing service agreements
    (MSAs) or other arrangements whereby we are the
    exclusive recommended provider of mortgage loans to each
    franchise or broker. We have entered into exclusive MSAs with 7%
    of Realogy Franchisees as of December 31, 2009. Following
    the Realogy Spin-Off, Realogy is a leading franchisor of real
    estate brokerage services in the U.S. In this channel, we
    primarily operate on a private-label basis, incorporating the
    brand name associated with the real estate broker, such as
    Coldwell Banker Mortgage, Century 21 Mortgage or ERA Mortgage.
    Substantially all of the originations through this channel
    during the years ended December 31, 2009, 2008 and 2007
    were originated from Realogy and the Realogy Franchisees.§
    Relocation Channel:  In this channel, we
    work with Cartus, Realogys relocation business, to provide
    mortgage loans to employees of Cartus clients. Cartus is
    the industry leader of outsourced corporate relocation services
    in the U.S. Substantially all of the originations through
    this channel during the years ended December 31, 2009, 2008
    and 2007 were from Cartus.      §
    Teleservices:  We operate a teleservices
    operation (also known as our Phone In, Move In program) that
    provides centralized processing along with consistent customer
    service. We utilize Phone In, Move In for all three origination
    channels described above. We also maintain multiple internet
    sites that provide online mortgage application capabilities for
    our customers.§
    Field Sales Professionals:  Members of
    our field sales force are generally located in real estate
    brokerage offices or are affiliated with financial institution
    clients around the U.S., and are equipped to provide product
    information, quote interest rates and help customers prepare
    mortgage applications. Through our
    MyChoicetm

    program, certain of our mortgage advisors are assigned a
    dedicated territory for marketing efforts and customers are
    provided with the option of applying for mortgage loans over the
    telephone, in person or online through the internet. 8




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§
    Closed Mortgage Loan Purchases:  We
    purchase closed mortgage loans from community banks, credit
    unions, mortgage brokers and mortgage bankers. We also acquire
    mortgage loans from mortgage brokers that receive applications
    from and qualify the borrowers.    Year Ended December 31,2009


2008


2007(Dollars in millions)Loans closed to be sold

$
29,370


$
20,753


$
29,207Fee-based closings


8,194



13,166



10,338Total closings

$
37,564


$
33,919


$
39,545Loans sold

$
29,002


$
21,079


$
30,346Total Mortgage Originations by Channel:Financial institutions


63%



63%



55%Real estate brokers


35%



33%



40%Relocation


2%



4%



5%Total Mortgage Originations by Platform:Teleservices


47%



58%



54%Field sales professionals


38%



27%



23%Closed mortgage loan purchases


15%



15%



23%       Year Ended December 31,2009


2008


2007Fixed rate


81%



59%



65%Adjustable rate


19%



41%



35%Purchase closings


41%



63%



65%Refinance closings


59%



37%



35%Conforming(1)


82%



64%



60%Non-conforming:Jumbo(2)


13%



19%



24%Alt-A(3)










4%Second lien


5%



15%



9%Other






2%



3%Total Non-conforming


18%



36%



40%     (1)
    
    Represents mortgage loans that
    conform to the standards of the GSEs.(2)
    
    Represents mortgage loans that have
    loan amounts exceeding the GSE guidelines.(3)
    
    Represents mortgage loans that are
    made to borrowers with prime credit histories, but do not meet
    the documentation requirements of a conforming loan. 9




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Appraisal
    Services Business
    Mortgage
    Servicing Segment
    Year Ended and As of December 31,2009


2008


2007(Dollars in millions, except average loan size)Average loan servicing portfolio

$
149,628


$
152,681


$
163,107Ending loan servicing
    portfolio(1)

$
151,481


$
149,750


$
159,183Number of loans
    serviced(1)


954,063



975,120



1,063,187Average loan size

$
158,775


$
153,571


$
149,723Weighted-average interest rate


5.3%



5.8%



6.1%Delinquent Mortgage
    Loans:(2)30 days


2.26%



2.31%



1.93%60 days


0.69%



0.62%



0.46%90 days or more


1.73%



0.74%



0.41%Total delinquencies


4.68%



3.67%



2.80%Foreclosures/real estate owned/bankruptcies


2.84%



1.83%



0.87%Major Geographical Concentrations:California


13.6%



12.4%



11.4%Florida


7.1%



7.2%



7.3%New Jersey


6.7%



7.1%



7.7%New York


6.5%



6.7%



7.0%Other


66.1%



66.6%



66.6%     (1)
    
    As of December 31, 2007,
    approximately 130,000 loans with an unpaid principal balance of
    $19.3 billion for which the underlying MSRs had been sold
    were included in our loan servicing portfolio. We subserviced
    these loans until the MSRs were transferred from our systems to
    the purchasers systems during the second quarter of 2008.(2)
    
    Represents the loan servicing
    portfolio delinquencies as a percentage of the total unpaid
    principal balance of the portfolio. See
    Part IIItem 7A. Quantitative and
    Qualitative Disclosures About Market RiskConsumer Credit
    RiskLoan Recourse for information regarding the
    delinquency of loans sold with recourse by us and those for
    which a breach of representation or warranty provision was
    identified subsequent to sale.  Mortgage
    Guaranty Reinsurance Business
  and/or
 10




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Form 10-K
  Competition
    Inside Mortgage Finance
        Seasonality
   11




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Trademarks
    and Intellectual Property
    Mortgage
    Regulation
      Insurance
    Regulation
     12




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Fleet
    Management Services Segment
  Automotive Fleet 2009 Fact Book and/or Form 10-K)
  Year Ended and As of December 31,2009


2008


2007(In millions)Fleet Management Services Net revenues

$
1,649


$
1,827


$
1,861Fleet Management Services Segment profit


54



62



116Fleet Management Services Assets


4,331



4,956



5,023   24-hour
    §
    Fleet Leasing and Fleet Management
    Services.  These services include vehicle
    leasing, fleet policy analysis and recommendations,
    benchmarking, vehicle recommendations, ordering and purchasing
    vehicles, arranging for vehicle delivery and administration of
    the title and registration process, as well as tax and insurance
    requirements, pursuing warranty claims and remarketing used
    vehicles. We also offer various leasing options, financed
    primarily through the issuance of variable-rate notes and
    borrowings through an asset-backed structure. For the year ended
    December 31, 2009, we averaged 314,000 leased vehicles.
    Substantially all of the residual risk on the value of the
    vehicle at the end of the lease term remains with the lessee for
    approximately 95% of our Net investment in fleet leases. These
    leases typically have a minimum lease term of 12 months and
    can be continued after that at the lessees election for
    successive monthly renewals. Upon return of the vehicle by the
    lessee, we typically sell the vehicle into the secondary market
    and the client receives a credit or pays the difference between
    the sale proceeds and the undepreciated book value. For the
    remaining 5% of our Net investment in fleet leases, we retain
    the residual risk of the value of the vehicle at the end of the
    lease term. We maintain rigorous standards with respect to the
    creditworthiness of our clients. Net credit losses as a
    percentage of the ending balance of Net investment in fleet
    leases have not exceeded 0.01% in any of the last three fiscal
    years. During the years ended December 31, 2009, 2008 and
    2007, our fleet leasing and fleet management servicing generated
    approximately 90%, 89% and 88%, respectively, of our Net
    revenues for our Fleet Management Services segment. 13




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§
    Maintenance Services.  We offer clients
    vehicle maintenance service cards that are used to facilitate
    payment for repairs and maintenance. We maintain an extensive
    network of third-party service providers in the U.S. and
    Canada to ensure ease of use by the clients drivers. The
    vehicle maintenance service cards provide clients with the
    following benefits: (i) negotiated discounts off of full
    retail prices through our convenient supplier network;
    (ii) access to our in-house team of certified maintenance
    experts that monitor transactions for policy compliance,
    reasonability and cost-effectiveness and (iii) inclusion of
    vehicle maintenance transactions in a consolidated information
    and billing database, which assists clients with the evaluation
    of overall fleet performance and costs. For the year ended
    December 31, 2009, we averaged 275,000 maintenance service
    cards outstanding in the U.S. and Canada. We receive a
    fixed monthly fee for these services from our clients as well as
    additional fees from service providers in our third-party
    network for individual maintenance services.§
    Accident Management Services.  We
    provide our clients with comprehensive accident management
    services such as immediate assistance upon receiving the initial
    accident report from the driver (e.g., facilitating emergency
    towing services and car rental assistance), an organized vehicle
    appraisal and repair process through a network of third-party
    preferred repair and body shops and coordination and negotiation
    of potential accident claims. Our accident management services
    provide our clients with the following benefits:
    (i) convenient, coordinated
    24-hour
    assistance from our call center; (ii) access to our
    relationships with the repair and body shops included in our
    preferred supplier network, which typically provide clients with
    favorable terms and (iii) expertise of our damage
    specialists, who ensure that vehicle appraisals and repairs are
    appropriate, cost-efficient and in accordance with each
    clients specific repair policy. For the year ended
    December 31, 2009, we averaged 305,000 vehicles that were
    participating in accident management programs with us in the
    U.S. and Canada. We receive fees from our clients for these
    services as well as additional fees from service providers in
    our third-party network for individual incident services.§
    Fuel Card Services.  We provide our
    clients with fuel card programs that facilitate the payment,
    monitoring and control of fuel purchases through PHH Arval. Fuel
    is typically the single largest fleet-related operating expense.
    By using our fuel cards, our clients receive the following
    benefits: access to more fuel brands and outlets than other
    private-label corporate fuel cards,
    point-of-sale
    processing technology for fuel card transactions that enhances
    clients ability to monitor purchases and consolidated
    billing and access to other information on fuel card
    transactions, which assists clients with the evaluation of
    overall fleet performance and costs. Our fuel cards are offered
    through relationships with Wright Express LLC and another third
    party in the U.S. and a proprietary card in Canada, which
    offer expanded fuel management capabilities on one service card.
    For the year ended December 31, 2009, we averaged 282,000
    fuel cards outstanding in the U.S. and Canada. We receive
    both monthly fees from our fuel card clients and additional fees
    from fuel partners and providers.    Year Ended December 31,2009


2008


2007(In millions)Net revenues:Domestic

$
1,489


$
1,702


$
1,781Foreign


160



125



80     As of December 31,2009


2008


2007(In millions)Assets:Domestic

$
3,756


$
4,494


$
4,699Foreign


575



462



324  14




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Leases
      month-to-month month-to-month month-to-month
      Trademarks
    and Intellectual Property
   15




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Competition
    Seasonality
    Commercial
    Fleet Leasing Industry Regulation
      Employees
   16




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Item 1A.
    Risk
    Factors  Risks
    Related to our Business
  The termination of our status as the exclusive recommended
    provider of mortgage products and services promoted by the
    residential and commercial real estate brokerage business owned
    and operated by Realogys affiliate, NRT, the title and
    settlement services business owned and operated by
    Realogys affiliate, TRG and the relocation business owned
    and operated by Realogys affiliate, Cartus, could have a
    material adverse effect on our business, financial position,
    results of operations or cash flows.
      §
    we materially breach any representation, warranty, covenant or
    other agreement contained in the Strategic Relationship
    Agreement, the Marketing Agreement, trademark license agreements
    (the Trademark License Agreements) or certain other
    related agreements;§
    we or the Mortgage Venture become subject to any regulatory
    order or governmental proceeding and such order or proceeding
    prevents or materially impairs the Mortgage Ventures
    ability to originate mortgage loans for any period of time
    (which order or proceeding is not generally applicable to
    companies in the mortgage lending business) in a manner that
    adversely affects the value of one or more of the quarterly
    distributions to be paid by the Mortgage Venture pursuant to the
    Mortgage Venture Operating Agreement;§
    the Mortgage Venture otherwise is not permitted by law,
    regulation, rule, order or other legal restriction to perform
    its origination function in any jurisdiction, but in such case
    exclusivity may be terminated only with respect to such
    jurisdiction or§
    the Mortgage Venture does not comply with its obligations to
    complete an acquisition of a mortgage loan origination company
    under the terms of the Strategic Relationship Agreement.    Continued or worsening general business, economic,
    environmental and political conditions could have a material
    adverse effect on our business, financial position, results of
    operations or cash flows.
   17




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Adverse developments in the secondary mortgage market
    could have a material adverse effect on our business, financial
    position, results of operations or cash flows.
       18




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We are highly dependent upon programs administered by GSEs
    such as Fannie Mae, Freddie Mac and Ginnie Mae to generate
    revenues through mortgage loan sales to institutional investors.
    Any changes in existing U.S. government-sponsored mortgage
    programs could materially and adversely affect our business,
    financial position, results of operations or cash flows.
      Continued or worsening conditions in the real estate
    market could adversely impact our business, financial position,
    results of operations or cash flows.
    Economic and Mortgage
    Market Analysis,
   19




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Adverse developments in the asset-backed securities market
    may negatively affect the availability of funding and our costs
    of funds, which could have a material and adverse effect on our
    business, financial position, results of operations or cash
    flows.
  Series 2006-2 Series 2009-1, Series 2009-2, Series 2009-3 Series 2009-4 Series 2006-2
        Certain hedging strategies that we may use to manage
    interest rate risk associated with our MSRs and other
    mortgage-related assets and commitments may not be effective in
    mitigating those risks.
     20




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We are exposed to counterparty risk and there can be no
    assurances that we will manage or mitigate this risk
    effectively.
            Conditions in the North American automotive industry may
    adversely affect the business, financial condition, results of
    operations or cash flows of our Fleet Management Services
    Segment.
   21




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Losses incurred in connection with actual or projected
    repurchases and indemnification payments may exceed our
    financial statement reserves and we may be required to increase
    such reserves in the future. Increases to our reserves and
    losses incurred in connection with actual loan repurchases and
    indemnification payments could have a material adverse effect on
    our business, financial position, results of operation or cash
    flows.
    Changes in interest rates could reduce the value of a
    substantial portion of our assets, including our MSRs, and could
    have a material adverse effect on our business, financial
    position, results of operations or cash flows.
    The values of a substantial portion of our assets,
    including our MSRs, are determined based upon significant
    estimates and assumptions made by our management that, if
    subsequently proven incorrect or inaccurate, could have a
    material adverse effect on our business, financial position,
    results of operations or cash flows.
    Our business relies on various sources of funding,
    including unsecured credit facilities and other unsecured debt,
    as well as secured funding arrangements, including asset-backed
    securities, mortgage repurchase facilities and other secured
    credit facilities. If any of our funding arrangements are
    terminated, not renewed or made unavailable to us, we may be
    unable to find replacement financing on commercially favorable
    terms, if at all, which could have a material adverse effect on
    our business, financial position, results of operations or cash
    flows.
   22




---



##### Table of Contents



The industries in which we operate are highly competitive
    and, if we fail to meet the competitive challenges in our
    industries, it could have a material adverse effect on our
    business, financial position, results of operations or cash
    flows.
     23




---



##### Table of Contents



The businesses in which we engage are complex and heavily
    regulated, and changes in the regulatory environment affecting
    our businesses could have a material adverse effect on our
    business, financial position, results of operations or cash
    flows.
           24




---



##### Table of Contents



Our Fleet Management Services segment contracts with
    various government agencies, which may be subject to audit and
    potential reduction of costs and fees.
    If certain change in control transactions occur, some of
    our mortgage loan origination arrangements with financial
    institutions could be subject to termination at the election of
    such institutions.
   25




---



##### Table of Contents



Unanticipated liabilities of our Fleet Management Services
    segment as a result of damages in connection with motor vehicle
    accidents under the theory of vicarious liability could have a
    material adverse effect on our business, financial position,
    results of operations or cash flows.
        Our failure to maintain our credit ratings could impact
    our ability to obtain financing on favorable terms and could
    negatively impact our business.
   26




---



##### Table of Contents



Given the nature of the industries in which we operate,
    our businesses are, and in the future may become, involved in
    various legal proceedings the ultimate resolution of which is
    inherently unpredictable and could have a material adverse
    effect on our business, financial position, results of
    operations or cash flows.
    Our accounting policies and methods are fundamental to how
    we record and report our financial position and results of
    operations, and they require management to make assumptions and
    estimates about matters that are inherently uncertain.
    Form 10-K, Form 10-K
  Changes in accounting standards issued by the Financial
    Accounting Standards Board (the FASB) or other
    standard-setting bodies may adversely affect our reported
    revenues, profitability or financial position.
  and/or
 27




---



##### Table of Contents



We depend on the accuracy and completeness of information
    provided by or on behalf of our customers and
    counterparties.
    An interruption in or breach of our information systems
    may result in lost business, regulatory actions or litigation or
    may otherwise have an adverse effect on our reputation,
    business, business prospects, financial position, results of
    operations or cash flows.
    The success and growth of our business may be adversely
    affected if we do not adapt to and implement technological
    changes.
    §
    becomes non-compliant with existing industry standards or is no
    longer supported by vendors;§
    fails to meet or exceed the capabilities of our
    competitors corresponding technologies or technological
    solutions;§
    becomes increasingly expensive to service, retain and
    update; or§
    becomes subject to third-party claims of copyright or patent
    infringement.    Risks
    Related to the Spin-Off
  Our agreements with Cendant and Realogy may not reflect
    terms that would have resulted from arms-length
    negotiations between unaffiliated parties.
   28




---



##### Table of Contents



We may be required to satisfy certain indemnification
    obligations to Cendant or Realogy, or we may not be able to
    collect on indemnification rights from Cendant or
    Realogy.
    Certain arrangements and agreements that we have entered
    into with Cendant in connection with the
    Spin-Off
    could impact our tax and other assets and liabilities in the
    future, and our financial statements are subject to future
    adjustments as a result of our obligations under those
    arrangements and agreements.
  Form 10-K.
  Risks
    Related to our Common Stock
  There may be a limited public market for our Common stock
    and our stock price may experience volatility.
    Future issuances of our Common stock or securities
    convertible into our Common stock and hedging activities may
    depress the trading price of our Common stock.
   29




---



##### Table of Contents



The convertible note hedge and warrant transactions may
    negatively affect the value of our Common stock.
    and/or and/or and/or
  The accounting for the Convertible Notes will result in
    our having to recognize interest expense significantly more than
    the stated interest rate of the Convertible Notes and may result
    in volatility to our accompanying Consolidated Statement of
    Operations.
       30




---



##### Table of Contents



Provisions in our charter and bylaws, the Maryland General
    Corporation Law (the MGCL), our stockholder rights
    plan and the indentures for the 2012 Convertible Notes and 2014
    Convertible Notes may delay or prevent our acquisition by a
    third party.
      §
    The business combinations statute which prohibits
    transactions between a Maryland corporation and an interested
    stockholder or an affiliate of an interested stockholder for
    five years after the most recent date on which the interested
    stockholder becomes an interested stockholder and§
    The control share acquisition statute which provides
    that control shares of a Maryland corporation acquired in a
    control share acquisition have no voting rights except to the
    extent approved by a vote of two-thirds of the votes entitled to
    be cast on the matter.        Certain provisions of the Mortgage Venture Operating
    Agreement and the Strategic Relationship Agreement that we have
    with Realogy and certain provisions in our other mortgage loan
    origination agreements could discourage third parties from
    seeking to acquire us or could reduce the amount of
    consideration they would be willing to pay our stockholders in
    an acquisition transaction.
 31




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##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Mortgage
    Production and Mortgage Servicing Segments
    Fleet
    Management Services Segment
    Item 3.
    Legal
    Proceedings   32




---



##### Table of Contents



Item 4.
    Reserved PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Price of Common Stock
    Stock PriceHigh


LowJanuary 1, 2008 to March 31, 2008

$
21.88


$
14.91April 1, 2008 to June 30, 2008


20.58



15.25July 1, 2008 to September 30, 2008


18.87



11.79October 1, 2008 to December 31, 2008


13.76



4.27January 1, 2009 to March 31, 2009


14.87



8.50April 1, 2009 to June 30, 2009


19.98



13.60July 1, 2009 to September 30, 2009


22.88



15.78October 1, 2009 to December 31, 2009


19.77



13.49     Dividend
    Policy
     33




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##### Table of Contents



Issuer
    Purchases of Equity Securities
    Item 6.
    Selected
    Financial Data        Year Ended and As of December 31,2009


2008(1)


2007


2006


2005(2)(In millions, except per share data)Consolidated Statements of Operations Data:Net revenues

$
2,606


$
2,056


$
2,240


$
2,288


$
2,471Net income (loss) from continuing operations

$
153


$
(254
)

$
(12
)

$
(16
)

$
73Loss from discontinued operations, net Of income taxes


















(1
)Net income (loss) attributable to PHH Corporation

$
153


$
(254
)

$
(12
)

$
(16
)

$
72Basic earnings (loss) per share attributable to PHH Corporation:Income (loss) from continuing operations

$
2.80


$
(4.68
)

$
(0.23
)

$
(0.29
)

$
1.38Loss from discontinued operations


















(0.02
)Net income (loss)

$
2.80


$
(4.68
)

$
(0.23
)

$
(0.29
)

$
1.36Diluted earnings (loss) per share attributable to PHH
    Corporation:Income (loss) from continuing operations

$
2.77


$
(4.68
)

$
(0.23
)

$
(0.29
)

$
1.36Loss from discontinued operations


















(0.02
)Net income (loss)

$
2.77


$
(4.68
)

$
(0.23
)

$
(0.29
)

$
1.34Consolidated Balance Sheets Data:Total assets

$
8,123


$
8,273


$
9,357


$
10,760


$
9,965Debt


5,160



5,764



6,279



7,647



6,744PHH Corporation stockholders equity


1,492



1,266



1,529



1,515



1,521     (1)
    
    Loss from continuing operations and
    Net loss for the year ended December 31, 2008 included
    $42 million of income related to a terminated merger
    agreement with General Electric Capital Corporation and a
    $61 million non-cash charge for Goodwill impairment
    ($26 million net of a $5 million income tax benefit
    and a $30 million impact in noncontrolling interest). See
    Note 3, Goodwill and Other Intangible Assets in
    the accompanying Notes to Consolidated Financial Statements
    included in this
    Form 10-K. 34




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##### Table of Contents



(2)
    
    Income from continuing operations
    and Net income for the year ended December 31, 2005
    included pre-tax Spin-Off related expenses of $41 million.
    In connection with and in order to consummate the Spin-Off, on
    January 27, 2005, our Board of Directors authorized and
    approved a 52,684-for-one Common stock split, to be effected by
    a stock dividend at such ratio. The record date with regard to
    such stock split was January 28, 2005.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion should be read in conjunction with
    Part IItem 1. Business and our
    Consolidated Financial Statements and the notes thereto included
    in this
    Form 10-K.
    The following discussion should also be read in conjunction with
    the Cautionary Note Regarding Forward-Looking
    Statements and the risks and uncertainties described in
    Part IItem 1A. Risk Factors set
    forth above.
  Overview
      Executive
    Summary
    Year EndedDecember 31,2009


2008(In millions)Net income (loss) attributable to PHH Corporation

$
153


$
(254
)Basic earnings (loss) per share attributable to PHH Corporation


2.80



(4.68
)Diluted earnings (loss) per share attributable to PHH Corporation


2.77



(4.68
)     §
    Combined Mortgage Services of $221 Million vs.
    $(520) Million:  strong mortgage
    production results from higher margins on mortgage loans and
    higher volumes of more profitable first mortgage retail
    originations and interest rate lock commitments
    (IRLCs) expected to close and our ongoing cost 35




---



##### Table of Contents



reduction initiatives that provided for a more scalable mortgage
    production platform coupled with a favorable change in Valuation
    adjustments related to mortgage servicing rights, net resulting
    from declines in mortgage interest rates at the end of 2008.  §
    Mortgage Production Segment of $306 Million vs.
    $(90) Million:  higher margins on
    mortgage loans, higher volumes of more profitable first mortgage
    retail originations and IRLCs expected to close, the impact of
    ongoing cost reduction initiatives and a more scalable mortgage
    production platform. Segment loss for 2008 was also negatively
    impacted by a Goodwill impairment related to PHH Home Loans.§
    Mortgage Servicing Segment of $(85) Million vs.
    $(430) Million: a favorable change in Valuation
    adjustments related to mortgage servicing rights, net resulting
    from declines in mortgage interest rates at the end of 2008 and
    a net derivative loss related to MSRs that was recognized during
    2008, partially offset by a greater reduction in the value of
    MSRs due to prepayments and changes in portfolio delinquencies
    and foreclosures. Lower earnings from escrow balances resulting
    from historically low short-term interest rates caused further
    deterioration in the segments results. Foreclosure-related
    and reinsurance-related charges also continued to negatively
    impact segment results.§
    Fleet Management Services Segment of $54 Million vs. $62
    Million:  during 2008, we recognized a gain of
    $7 million on the early termination of a technology
    development and licensing arrangement. Additionally, segment
    profit during 2009 compared to 2008 was driven by improved lease
    margins and the impact of ongoing cost reduction initiatives
    partially offset by volume declines.    Mortgage
    Services
  Regulatory
    Trends
       36




---



##### Table of Contents



Mortgage
    Industry Trends
  Overall
    Trends
      Economics and Mortgage
    Market Analysis
    Mortgage
    Production Trends
  Economics and Mortgage Market Analysis
   37




---



##### Table of Contents



December 31,2009(In millions)First mortgages:Conforming(1)

$
1,106Non-conforming


27Alt-A(2)


2Construction loans


16Total first mortgages


1,151Second lien


24Scratch and
    Dent(3)


41Other


2Total

$
1,218     (1)
    
    Represents mortgage loans that
    conform to the standards of the GSEs.(2)
    
    Represents mortgage loans that are
    made to borrowers with prime credit histories, but do not meet
    the documentation requirements of a conforming loan.(3)
    
    Represents mortgage loans with
    origination flaws or performance issues.  Mortgage
    Servicing Trends
   38




---



##### Table of Contents



Balance, January 1, 2008

$
49Realized foreclosure losses


(37
)Increase in foreclosure reserves


69Balance, December 31, 2008


81Realized foreclosure
    losses(1)


(73
)Increase in foreclosure reserves


78Balance, December 31, 2009

$
86     (1)
    
    Realized foreclosure losses for
    2009 include an $11 million settlement with an individual
    investor for all future potential repurchase liabilities.      Form 10-K
   39




---



##### Table of Contents



Balance, January 1, 2008

$
32Realized reinsurance losses


Increase in reinsurance reserves


51Balance, December 31, 2008


83Realized reinsurance
    losses(1)


(10
)Increase in reinsurance reserves


35Balance, December 31, 2009

$
108     (1)
    
    Realized reinsurance losses include
    a $7 million payment associated with the commutation of
    reinsurance agreements during 2009.    Seasonality
    Inflation
    Fleet
    Management Services Segment
  Fleet
    Industry Trends
  Automotive Fleet
 40




---



##### Table of Contents



Seasonality
    Inflation
    Market
    and Credit Risk
   41




---



##### Table of Contents



Results
    of Operations2009 vs. 2008
  Consolidated
    Results
    Year EndedDecember 31,2009


2008


Change(In millions)Net fee income

$
425


$
371


$
54Fleet lease income


1,441



1,585



(144
)Gain on mortgage loans, net


610



259



351Mortgage net finance (expense) income


(58
)


2



(60
)Loan servicing income


431



430



1Valuation adjustments related to mortgage servicing rights, net


(280
)


(733
)


453Other income


37



142



(105
)Net revenues


2,606



2,056



550Depreciation on operating leases


1,267



1,299



(32
)Fleet interest expense


89



162



(73
)Goodwill impairment






61



(61
)Total other expenses


970



977



(7
)Total expenses


2,326



2,499



(173
)Income (loss) before income taxes


280



(443
)


723Provision for (benefit from) income taxes


107



(162
)


269Net income (loss)


173



(281
)


454Less: net income (loss) attributable to noncontrolling interest


20



(27
)


47Net income (loss) attributable to PHH Corporation

$
153


$
(254
)

$
407      42




---



##### Table of Contents



Segment
    Results
    Mortgage
    Services
        Year EndedDecember 31,2009


2008


Change


% Change($ in millions)First mortgage closings (units)


153,694



115,873



37,821



33
%Second-lien closings (units)


10,692



30,176



(19,484
)


(65
)%Total number of loans closed (units)


164,386



146,049



18,337



13
%Average loan servicing portfolio

$
149,628


$
152,681


$
(3,053
)


(2
)%   Year Ended December 31,2009


2008


Change


% Change(In millions)Production-related
    expenses(1)

$
435


$
380


$
55



14
%Servicing-related expenses


73



64



9



14
%Foreclosure costs


70



73



(3
)


(4
)%Other expenses


143



155



(12
)


(8
)%Goodwill impairment






61



(61
)


(100
)%Total expenses

$
721


$
733


$
(12
)


(2
)%     (1)
    
    Approximately 83% of
    production-related expenses for 2009 are scalable with
    origination volumes.   43




---



##### Table of Contents



Year EndedDecember 31,2009


2008


Change


% Change(In millions)Mortgage fees

$
275


$
208


$
67



32

%Gain on mortgage loans, net


610



259



351



136

%Mortgage interest income


91



175



(84
)


(48
)
%Mortgage interest expense


(151
)


(171
)


20



12

%Mortgage net finance (expense) income


(60
)


4



(64
)


n/m(1
)Loan servicing income


431



430



1



Change in fair value of mortgage servicing rights


(280
)


(554
)


274



49

%Net derivative loss related to mortgage servicing rights






(179
)


179



100

%Valuation adjustments related to mortgage servicingrights


(280
)


(733
)


453



62

%Net loan servicing income (loss)


151



(303
)


454



n/m(1
)Other (expense) income


(14
)


18



(32
)


n/m(1
)Net revenues


962



186



776



417

%Salaries and related expenses


375



328



47



14

%Occupancy and other office expenses


41



55



(14
)


(25
)
%Other depreciation and amortization


15



14



1



7

%Other operating expenses


290



275



15



5

%Goodwill impairment






61



(61
)


(100
)
%Total expenses


721



733



(12
)


(2
)
%Income (loss) before income taxes


241



(547
)


788



n/m(1
)Less: net income (loss) attributable to noncontrolling interest


20



(27
)


47



n/m(1
)Combined Mortgage Services segments profit (loss)

$
221


$
(520
)

$
741



n/m(1
)     (1)
    
    n/mNot meaningful. 44




---



##### Table of Contents



Mortgage
    Production Segment
    Year EndedDecember 31,2009


2008


Change


% Change(Dollars in millions, exceptaverage loan amount)Loans closed to be sold

$
29,370


$
20,753


$
8,617



42

%Fee-based closings


8,194



13,166



(4,972
)


(38
)
%Total closings

$
37,564


$
33,919


$
3,645



11

%Purchase closings

$
15,401


$
21,403


$
(6,002
)


(28
)
%Refinance closings


22,163



12,516



9,647



77

%Total closings

$
37,564


$
33,919


$
3,645



11

%Fixed rate

$
30,512


$
20,008


$
10,504



52

%Adjustable rate


7,052



13,911



(6,859
)


(49
)
%Total closings

$
37,564


$
33,919


$
3,645



11

%First mortgage closings (units)


153,694



115,873



37,821



33

%Second-lien closings (units)


10,692



30,176



(19,484
)


(65
)
%Total number of loans closed (units)


164,386



146,049



18,337



13

%Average loan amount

$
228,510


$
232,241


$
(3,731
)


(2
)
%Loans sold

$
29,002


$
21,079


$
7,923



38

%Applications

$
54,283


$
48,545


$
5,738



12

%IRLCs expected to close

$
26,210


$
19,790


$
6,420



32

%   45




---



##### Table of Contents



Year EndedDecember 31,2009


2008


Change


% Change(In millions)Mortgage fees

$
275


$
208


$
67



32
%Gain on mortgage loans, net


610



259



351



136
%Mortgage interest income


79



92



(13
)


(14
)%Mortgage interest expense


(90
)


(99
)


9



9
%Mortgage net finance expense


(11
)


(7
)


(4
)


(57
)%Other income


6



2



4



200
%Net revenues


880



462



418



90
%Salaries and related expenses


336



297



39



13
%Occupancy and other office expenses


32



44



(12
)


(27
)%Other depreciation and amortization


14



13



1



8
%Other operating expenses


172



164



8



5
%Goodwill impairment






61



(61
)


(100
)%Total expenses


554



579



(25
)


(4
)%Income (loss) before income taxes


326



(117
)


443



n/m(1
)Less: net income (loss) attributable to noncontrolling interest


20



(27
)


47



n/m(1
)Segment profit (loss)

$
306


$
(90
)

$
396



n/m(1
)     (1)
    
    n/mNot meaningful.  Mortgage
    Production Statistics
        Mortgage
    Fees
   46




---



##### Table of Contents



Gain on
    Mortgage Loans, Net
    Form 10-K.)
    Year EndedDecember 31,2009


2008


Change


% Change(In millions)Gain on loans

$
552


$
353


$
199



56
%Change in fair value of MLHS and related derivatives:ARMs






(20
)


20



100
%Scratch and Dent and Alt-A loans


(7
)


(28
)


21



75
%Second-lien loans


(6
)


(6
)






Construction loans


(5
)






(5
)


n/m(1
)Jumbo loans


(2
)


(15
)


13



87
%Economic hedge results


78



(55
)


133



n/m(1
)Total change in fair value of MLHS and related derivatives


58



(124
)


182



n/m(1
)Benefit of transition provision of updates to ASC 815






30



(30
)


(100
)%Gain on mortgage loans, net

$
610


$
259


$
351



136
%     (1)
    
    n/mNot meaningful.   47




---



##### Table of Contents



Mortgage
    Net Finance Expense
    Salaries
    and Related Expenses
    Occupancy
    and Other Office Expenses
   48




---



##### Table of Contents



Other
    Operating Expenses
    Mortgage
    Servicing Segment
    Year EndedDecember 31,2009


2008


Change


% Change(In millions)Average loan servicing portfolio

$
149,628


$
152,681


$
(3,053
)


(2
)
%   Year EndedDecember 31,2009


2008


Change


% Change(In millions)Mortgage interest income

$
12


$
83


$
(71
)


(86
)%Mortgage interest expense


(61
)


(72
)


11



15
%Mortgage net finance (expense) income


(49
)


11



(60
)


n/m(1
)Loan servicing income


431



430



1



Change in fair value of mortgage servicing rights


(280
)


(554
)


274



49
%Net derivative loss related to mortgage servicing rights






(179
)


179



100
%Valuation adjustments related to mortgage servicing rights


(280
)


(733
)


453



62
%Net loan servicing income (loss)


151



(303
)


454



n/m(1
)Other (expense) income


(20
)


16



(36
)


n/m(1
)Net revenues


82



(276
)


358



n/m(1
)Salaries and related expenses


39



31



8



26
%Occupancy and other office expenses


9



11



(2
)


(18
)%Other depreciation and amortization


1



1







Other operating expenses


118



111



7



6
%Total expenses


167



154



13



8
%Segment loss

$
(85
)

$
(430
)

$
345



80
%     (1)
    
    n/mNot meaningful.  Mortgage
    Net Finance (Expense) Income
   49




---



##### Table of Contents



Loan
    Servicing Income
      Year EndedDecember 31,2009


2008


Change


% Change(In millions)Net service fee revenue

$
422


$
431


$
(9
)


(2
)%Late fees and other ancillary servicing revenue


58



43



15



35
%Curtailment interest paid to investors


(44
)


(27
)


(17
)


(63
)%Net reinsurance loss


(5
)


(17
)


12



71
%Loan servicing income

$
431


$
430


$
1



     Valuation
    Adjustments Related to Mortgage Servicing Rights
    Change in Fair Value of Mortgage Servicing
    Rights:
 50




---



##### Table of Contents



Year EndedDecember 31,2009


2008


Change


% Change(In millions)Actual prepayments of the underlying mortgage loans

$
(244
)

$
(144
)

$
(100
)


(69
)%Actual receipts of recurring cash flows


(56
)


(65
)


9



14
%Credit-related fair value
    adjustments(1)


(91
)


(58
)


(33
)


(57
)%Market-related fair value
    adjustments(2)


111



(287
)


398



n/m(3
)Change in fair value of mortgage servicing rights

$
(280
)

$
(554
)

$
274



49
%     (1)
    
    Represents the change in fair value
    of MSRs primarily due to changes in portfolio delinquencies and
    foreclosures.(2)
    
    Represents the change in fair value
    of MSRs due to changes in market inputs and assumptions used in
    the valuation model.(3)
    
    n/mNot meaningful.        Net Derivative Loss Related to Mortgage Servicing
    Rights: Form 10-K.) Form 10-K
   51




---



##### Table of Contents



Year EndedDecember 31,2009


2008(In millions)Change in fair value of mortgage servicing rights due to changes
    in market inputs or assumptions used in the valuation model

$
111


$
(287
)Net derivative loss related to mortgage servicing rights






(179
)Net gain (loss) on MSRs risk management activities

$
111


$
(466
)     Other
    (Expense) Income
    Salaries
    and Related Expenses
    Other
    Operating Expenses
    Fleet
    Management Services Segment
     52




---



##### Table of Contents



Average for theYear EndedDecember 31,2009

2008

Change

% Change(In thousands of units)Leased vehicles


314



335



(21
)


(6
)%Maintenance service cards


275



299



(24
)


(8
)%Fuel cards


282



296



(14
)


(5
)%Accident management vehicles


305



323



(18
)


(6
)%   Year EndedDecember 31,2009


2008


Change


%Change(In millions)Fleet management fees

$
150


$
163


$
(13
)


(8
)
%Fleet lease income


1,441



1,585



(144
)


(9
)
%Other income


58



79



(21
)


(27
)
%Net revenues


1,649



1,827



(178
)


(10
)
%Salaries and related expenses


86



100



(14
)


(14
)
%Occupancy and other office expenses


18



19



(1
)


(5
)
%Depreciation on operating leases


1,267



1,299



(32
)


(2
)
%Fleet interest expense


95



169



(74
)


(44
)
%Other depreciation and amortization


11



11







Other operating expenses


118



167



(49
)


(29
)
%Total expenses


1,595



1,765



(170
)


(10
)
%Segment profit

$
54


$
62


$
(8
)


(13
)
%   Fleet
    Management Fees
    Fleet
    Lease Income
   53




---



##### Table of Contents



Other
    Income
    Salaries
    and Related Expenses
    Depreciation
    on Operating Leases
    Fleet
    Interest Expense
    Other
    Operating Expenses
   54




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##### Table of Contents



Results
    of Operations2008 vs. 2007
  Consolidated
    Results
    Year EndedDecember 31,2008


2007


Change(In millions)Net fee income

$
371


$
291


$
80Fleet lease income


1,585



1,598



(13
)Gain on mortgage loans, net


259



94



165Mortgage net finance income


2



84



(82
)Loan servicing income


430



489



(59
)Valuation adjustments related to mortgage servicing rights, net


(733
)


(413
)


(320
)Other income


142



97



45Net revenues


2,056



2,240



(184
)Depreciation on operating leases


1,299



1,264



35Fleet interest expense


162



213



(51
)Goodwill impairment


61







61Total other expenses


977



808



169Total expenses


2,499



2,285



214Loss before income taxes


(443
)


(45
)


(398
)Benefit from income taxes


(162
)


(35
)


(127
)Net loss


(281
)


(10
)


(271
)Less: net (loss) income attributable to noncontrolling interest


(27
)


2



(29
)Net loss attributable to PHH Corporation

$
(254
)

$
(12
)

$
(242
)        55




---



##### Table of Contents



Segment
    Results
    Mortgage
    Production Segment
         56




---



##### Table of Contents



Year Ended December 31,2008


2007


Change


% Change(Dollars in millions, exceptaverage loan amount)Loans closed to be sold

$
20,753


$
29,207


$
(8,454
)


(29
)
%Fee-based closings


13,166



10,338



2,828



27

%Total closings

$
33,919


$
39,545


$
(5,626
)


(14
)
%Purchase closings

$
21,403


$
25,692


$
(4,289
)


(17
)
%Refinance closings


12,516



13,853



(1,337
)


(10
)
%Total closings

$
33,919


$
39,545


$
(5,626
)


(14
)
%Fixed rate

$
20,008


$
25,525


$
(5,517
)


(22
)
%Adjustable rate


13,911



14,020



(109
)


(1
)
%Total closings

$
33,919


$
39,545


$
(5,626
)


(14
)
%Number of loans closed (units)


146,049



182,885



(36,836
)


(20
)
%Average loan amount

$
232,241


$
216,228


$
16,013



7

%Loans sold

$
21,079


$
30,346


$
(9,267
)


(31
)
%Applications

$
48,545


$
52,533


$
(3,988
)


(8
)
%   Year Ended December 31,2008


2007


Change


% Change(In millions)Mortgage fees

$
208


$
127


$
81



64

%Gain on mortgage loans, net


259



94



165



176

%Mortgage interest income


92



171



(79
)


(46
)
%Mortgage interest expense


(99
)


(190
)


91



48

%Mortgage net finance expense


(7
)


(19
)


12



63

%Other income


2



3



(1
)


(33
)
%Net revenues


462



205



257



125

%Salaries and related expenses


297



195



102



52

%Occupancy and other office expenses


44



49



(5
)


(10
)
%Other depreciation and amortization


13



15



(2
)


(13
)
%Other operating expenses


164



170



(6
)


(4
)
%Goodwill impairment


61







61



n/m(1
)Total expenses


579



429



150



35

%Loss before income taxes


(117
)


(224
)


107



48

%Less: net (loss) income attributable to noncontrolling interest


(27
)


2



(29
)


n/m(1
)Segment loss

$
(90
)

$
(226
)

$
136



60

%     (1)
    
    n/mNot meaningful. 57




---



##### Table of Contents



Mortgage
    Fees
        Year EndedDecember 31,2008


2007


Change


% Change(In millions)Mortgage fees prior to the deferral of fee income

$
208


$
228


$
(20
)


(9
)%Deferred fees






(101
)


101



n/m
(1)Mortgage fees

$
208


$
127


$
81



64
%     (1)
    
    n/mNot meaningful.    Gain on
    Mortgage Loans, Net
     58




---



##### Table of Contents



Form 10-K.)
      Year EndedDecember 31,2008


2007


Change


% Change(In millions)Gain on loans

$
353


$
324


$
29



9
%Economic hedge results:Decline in valuation of ARMs


(20
)


(11
)


(9
)


(82
)%Decline in valuation of Scratch and Dent loans


(27
)


(48
)


21



44
%Decline in valuation of Alt-A loans


(1
)


(8
)


7



88
%Decline in valuation of second-lien loans


(6
)


(28
)


22



79
%Decline in valuation of jumbo loans


(15
)


(4
)


(11
)


(275
)%Other economic hedge results


(55
)


(38
)


(17
)


(45
)%Total economic hedge results


(124
)


(137
)


13



9
%Increase in LOCOM reserve






(17
)


17



n/m(1
)Recognition of deferred fees and costs, net






(76
)


76



n/m(1
)Benefit of transition provision of updates to ASC 815


30







30



n/m(1
)Gain on mortgage loans, net

$
259


$
94


$
165



176
%     (1)
    
    n/mNot meaningful.     59




---



##### Table of Contents



Mortgage
    Net Finance Expense
    Salaries
    and Related Expenses
    Year EndedDecember 31,2008


2007


Change


% Change(In millions)Salaries and related expenses prior to the deferral of loan
    origination costs

$
297


$
343


$
(46
)


(13
)%Deferred loan origination costs






(148
)


148



n/m
(1)Salaries and related expenses

$
297


$
195


$
102



52
%     (1)
    
    n/mNot meaningful.   60




---



##### Table of Contents



Other
    Operating Expenses
    Year Ended December 31,2008


2007


Change


% Change(In millions)Other operating expenses prior to the deferral of loan
    origination costs

$
164


$
182


$
(18
)


(10
)%Deferred loan origination costs






(12
)


12



n/m
(1)Other operating expenses

$
164


$
170


$
(6
)


(4
)%     (1)
    
    n/mNot meaningful.    Mortgage
    Servicing Segment
        Year Ended December 31,2008


2007


Change


% Change(In millions)Average loan servicing portfolio

$
152,681


$
163,107


$
(10,426
)


(6
)%   61




---



##### Table of Contents



Year Ended December 31,2008


2007


Change


% Change(In millions)Mortgage interest income

$
83


$
182


$
(99
)


(54
)%Mortgage interest expense


(72
)


(85
)


13



15
%Mortgage net finance income


11



97



(86
)


(89
)%Loan servicing income


430



489



(59
)


(12
)%Change in fair value of mortgage servicing rights


(554
)


(509
)


(45
)


(9
)%Net derivative (loss) gain related to mortgage servicing rights


(179
)


96



(275
)


n/m(1
)Valuation adjustments related to mortgage servicing rights


(733
)


(413
)


(320
)


(77
)%Net loan servicing (loss) income


(303
)


76



(379
)


n/m(1
)Other income


16



3



13



433
%Net revenues


(276
)


176



(452
)


n/m(1
)Salaries and related expenses


31



29



2



7
%Occupancy and other office expenses


11



10



1



10
%Other depreciation and amortization


1



2



(1
)


(50
)%Other operating expenses


111



60



51



85
%Total expenses


154



101



53



52
%Segment (loss) profit

$
(430
)

$
75


$
(505
)


n/m(1
)     (1)
    
    n/mNot meaningful.  Mortgage
    Net Finance Income
    Loan
    Servicing Income
   62




---



##### Table of Contents



Year EndedDecember 31,2008


2007


Change


% Change(In millions)Net service fee revenue

$
431


$
494


$
(63
)


(13
)%Late fees and other ancillary servicing revenue


43



21



22



105
%Curtailment interest paid to investors


(27
)


(40
)


13



33
%Net reinsurance (loss) income


(17
)


14



(31
)


n/m
(1)Loan servicing income

$
430


$
489


$
(59
)


(12
)%     (1)
    
    n/mNot meaningful.    Valuation
    Adjustments Related to Mortgage Servicing Rights
    Change in Fair Value of Mortgage Servicing
    Rights:
    Year EndedDecember 31,2008


2007


Change


% Change(In millions)Realization of expected cash flows

$
(267
)

$
(315
)

$
48



15
%Changes in market inputs or assumptions used in the valuation
    model


(287
)


(194
)


(93
)


(48
)%Change in fair value of mortgage servicing rights

$
(554
)

$
(509
)

$
(45
)


(9
)%   Realization of Expected Cash Flows:
 63




---



##### Table of Contents



Changes in market inputs or assumptions used in the valuation
    model:
  Net Derivative (Loss) Gain Related to Mortgage Servicing
    Rights: Form 10-K.) Form 10-K
   64




---



##### Table of Contents



Year EndedDecember 31,2008


2007(In millions)Net derivative (loss) gain related to mortgage servicing rights

$
(179
)

$
96Change in fair value of mortgage servicing rights due to changes
    in market inputs or assumptions used in the valuation model


(287
)


(194
)Net loss on MSRs risk management activities

$
(466
)

$
(98
)   Other
    Income
    Salaries
    and Related Expenses
    Other
    Operating Expenses
    Fleet
    Management Services Segment
       65




---



##### Table of Contents



Average for theYear EndedDecember 31,2008


2007


Change


% Change(In thousands of units)Leased vehicles


335



342



(7
)


(2
)%Maintenance service cards


299



326



(27
)


(8
)%Fuel cards


296



330



(34
)


(10
)%Accident management vehicles


323



334



(11
)


(3
)%   Year EndedDecember 31,2008


2007


Change


% Change(In millions)Fleet management fees

$
163


$
164


$
(1
)


(1
)%Fleet lease income


1,585



1,598



(13
)


(1
)%Other income


79



99



(20
)


(20
)%Net revenues


1,827



1,861



(34
)


(2
)%Salaries and related expenses


100



92



8



9
%Occupancy and other office expenses


19



18



1



6
%Depreciation on operating leases


1,299



1,264



35



3
%Fleet interest expense


169



215



(46
)


(21
)%Other depreciation and amortization


11



12



(1
)


(8
)%Other operating expenses


167



144



23



16
%Total expenses


1,765



1,745



20



1
%Segment profit

$
62


$
116


$
(54
)


(47
)%   Fleet
    Management Fees
    Fleet
    Lease Income
    Other
    Income
   66




---



##### Table of Contents



Salaries
    and Related Expenses
    Depreciation
    on Operating Leases
    Fleet
    Interest Expense
    Other
    Operating Expenses
    Liquidity
    and Capital Resources
  General
       67




---



##### Table of Contents



Cash
    Flows
    Year EndedDecember 31,2009


2008


Change(In millions)Cash provided by (used in):Operating activities

$
1,283


$
1,893


$
(610
)Investing activities


(550
)


(1,408
)


858Financing activities


(655
)


(553
)


(102
)Effect of changes in exchange rates on Cash and cash equivalents


(37
)


28



(65
)Net increase (decrease) in Cash and cash equivalents

$
41


$
(40
)

$
81   Operating
    Activities
   68




---



##### Table of Contents



Investing
    Activities
    Financing
    Activities
    Secondary
    Mortgage Market
  and/or
    Form 10-K
 69




---



##### Table of Contents



Indebtedness
    December 31,2009


2008(In millions)Restricted cash

$
596


$
614Mortgage loans held for sale


1,218



1,006Net investment in fleet leases


3,610



4,204Mortgage servicing rights


1,413



1,282Investment securities


12



37Assets under management programs

$
6,849


$
7,143  70




---



##### Table of Contents



December 31, 2009Assets Held as
    Collateral(1)Mortgage


NetMaturity/








Loans


InvestmentInterest


Expiry


Accounts


Restricted


Held for


in FleetBalance


Capacity(2)


Rate(3)


Date(4)


Receivable


Cash


Sale


Leases(5)(Dollars in millions)Chesapeake
    Series 2006-2
    Variable Funding Notes

$
657


$
657







2/26/2009
(6
)Chesapeake
    Series 2009-1
    Term Notes


1,000



1,000







5/20/2010Chesapeake
    Series 2009-2
    Class A Term Notes


850



850







2/17/2011Chesapeake
    Series 2009-2
    Class B Term
    Notes(7)


28



28







2/17/2011Chesapeake
    Series 2009-2
    Class C Term
    Notes(7)


24



24







2/17/2011Chesapeake
    Series 2009-3
    Class A Term Notes


50



50







10/20/2011Chesapeake
    Series 2009-4
    Class A Term Notes


250



250







2/18/2010Other


33



33







3/2010-
    6/2016Total Vehicle Management Asset-Backed Debt


2,892



2,892



2.0
%(8)






$
21


$
297


$



$
3,082RBS Repurchase
    Facility(9)


622



1,500



3.0
%


6/24/2010








1



667



Fannie Mae Repurchase
    Facilities(10)


325



325



1.0
%


N/A












333



Other(11)


49



60



2.7
%


9/2010-
    10/2010




52







5



Total Mortgage Warehouse Asset-Backed Debt


996



1,885












52



1



1,005



6.5
%-


4/2010-Term
    Notes(12)


439



439



7.9
%(13)


4/2018
















Credit
    Facilities(14)


432



1,305



1.0
%(15)


1/6/2011
















Convertible Notes due
    2012(16)


221



221



4.0
%


4/15/2012
















Convertible Notes due
    2014(17)


180



180



4.0
%


9/1/2014
















Total Unsecured Debt


1,272



2,145
























Total Debt

$
5,160


$
6,922











$
73


$
298


$
1,005


$
3,082     (1)
    
    Assets held as collateral are not
    available to pay our general obligations.(2)
    
    Capacity is dependent upon
    maintaining compliance with, or obtaining waivers of, the terms,
    conditions and covenants of the respective agreements. With
    respect to asset-backed funding arrangements, capacity may be
    further limited by the asset eligibility requirements under the
    respective agreements. The Chesapeake Term Notes have revolving
    periods during which time the pro-rata share of lease cash flows
    pledged to Chesapeake will create availability to fund the
    acquisition of vehicles to be leased to customers of our Fleet
    Management Services segment. See Asset-Backed
    DebtVehicle Management Asset-Backed Debt below for
    additional information.(3)
    
    Represents the variable interest
    rate as of the respective date, with the exception of total
    vehicle management asset-backed debt, term notes and the
    Convertible Notes. 71




---



##### Table of Contents



(4)
    
    The maturity date for the
    Chesapeake Term Notes represents the end of the respective
    revolving period, during which time the respective notes
    pro-rata share of lease cash flows pledged to Chesapeake will
    create availability to fund the acquisition of vehicles to be
    leased to customers of our Fleet Management Services segment.
    Subsequent to the revolving period, the notes will amortize in
    accordance with their terms (as further discussed below). See
    Asset-Backed DebtVehicle Management Asset-Backed
    Debt below for additional information.(5)
    
    The titles to all the vehicles
    collateralizing the debt issued by Chesapeake are held in a
    bankruptcy remote trust and we act as a servicer of all such
    leases. The bankruptcy remote trust also acts as a lessor under
    both operating and direct financing lease agreements.(6)
    
    We elected to allow the
    Series 2006-2
    notes to amortize in accordance with their terms on the
    Scheduled Expiry Date (as defined below). During the
    Amortization Period (as defined below), we are unable to borrow
    additional amounts under these notes. See Asset-Backed
    DebtVehicle Management Asset-Backed Debt below for
    additional information.(7)
    
    The carrying amount of the
    Chesapeake
    Series 2009-2
    Series B and Series C term notes as of
    December 31, 2009 is net of an unamortized discount of
    $3 million and $5 million, respectively. See
    Asset-Backed DebtVehicle Management Asset-Backed
    Debt below for additional information.(8)
    
    Represents the weighted-average
    interest rate of our vehicle management asset-backed debt
    arrangements as of December 31, 2009.(9)
    
    We maintain a variable-rate
    committed mortgage repurchase facility (the RBS Repurchase
    Facility) with The Royal Bank of Scotland plc
    (RBS). At our election, subject to compliance with
    the terms of the Amended and Restated Master Repurchase
    Agreement (the Amended Repurchase Agreement) and
    payment of renewal fees, the RBS Repurchase Facility was renewed
    for an additional
    364-day term
    on June 25, 2009.(10)
    
    The balance and capacity represents
    amounts outstanding under our variable-rate uncommitted mortgage
    repurchase facilities (the Fannie Mae Repurchase
    Facilities) with Fannie Mae. Total uncommitted capacity
    was approximately $3.0 billion as of December 31, 2009.(11)
    
    Represents the variable interest
    rate on the majority of other mortgage warehouse asset-backed
    debt as of December 31, 2009. The outstanding balance as of
    December 31, 2009 also includes $5 million outstanding
    under another variable-rate mortgage warehouse facility that
    bore interest at 3.1%.(12)
    
    Represents medium-term notes (the
    MTNs) publicly issued under the indenture, dated as
    of November 6, 2000 (as amended and supplemented, the
    MTN Indenture) by and between PHH and The Bank of
    New York, as successor trustee for Bank One Trust Company,
    N.A.(13)
    
    Represents the range of stated
    interest rates of the MTNs outstanding as of December 31,
    2009. The effective rate of interest of our outstanding MTNs was
    7.2% as of December 31, 2009.(14)
    
    Credit facilities primarily
    represents a $1.3 billion Amended and Restated Competitive
    Advance and Revolving Credit Agreement (the Amended Credit
    Facility), dated as of January 6, 2006, among PHH, a
    group of lenders and JPMorgan Chase Bank, N.A., as
    administrative agent.(15)
    
    Represents the interest rate on the
    Amended Credit Facility as of December 31, 2009, excluding
    per annum utilization and facility fees. The outstanding balance
    as of December 31, 2009 also includes $72 million
    outstanding under another variable-rate credit facility that
    bore interest at 1.0%. See Unsecured DebtCredit
    Facilities below for additional information.(16)
    
    On April 2, 2008, we completed
    a private offering of our 2012 Convertible Notes with an
    aggregate principal amount of $250 million and a maturity
    date of April 15, 2012 to certain qualified institutional
    buyers. The carrying amount as of December 31, 2009 is net
    of an unamortized discount of $29 million. The effective
    rate of interest of the 2012 Convertible Notes was 12.4% as of
    December 31, 2009, which represents the 4.0% semiannual
    cash payment and the non-cash accretion of discount and issuance
    costs. There were no conversions of the 2012 Convertible Notes
    during 2009.(17)
    
    On September 29, 2009, we
    completed a private offering of our 2014 Convertible Notes with
    an aggregate principal balance of $250 million and a
    maturity date of September 1, 2014 to certain qualified
    institutional buyers. The carrying amount as of
    December 31, 2009 is net of an unamortized discount of
    $70 million. The effective rate of interest of the 2014
    Convertible Notes was 13.0% as of December 31, 2009, which
    represents the 4.0% semiannual cash payment and the non-cash
    accretion of discount and issuance costs. There were no
    conversions of the 2014 Convertible Notes during 2009.  Asset-Backed
    Debt
  Vehicle
    Management Asset-Backed Debt
   72




---



##### Table of Contents



Series 2006-1 Series 2006-1 Series 2006-2 Series 2006-1
    Series 2009-2, Series 2009-2 Series 2009-2 Series 2009-3 2009-4 Series 2006-1
      Class A-1 Series 2010-1 Class A-1 Class A-2 Series 2010-1 Series 2010-1 Class A-2 Series 2010-1 Class A-1 Series 2010-1 Series 2010-1 Series 2010-1
 73




---



##### Table of Contents



Series 2010-1 Class A-1 Class A-2 Series 2010-1 Series 2010-1
  Mortgage
    Warehouse Asset-Backed Debt
  364-day
    Form 10-K
  Unsecured
    Debt
   74




---



##### Table of Contents



MoodysInvestors

Standard

FitchService

& Poors

RatingsSenior unsecured debt


Ba2



BB
+


BB
+Short-term debt


NP



B



B         Credit
    Facilities
    Convertible
    Notes
     75




---



##### Table of Contents



st st th th
        Debt
    Maturities
   76




---



##### Table of Contents



Asset-Backed


Unsecured


Total(In millions)Within one year

$
1,682


$
5


$
1,687Between one and two years


906



432



1,338Between two and three years


669



250



919Between three and four years


378



420



798Between four and five years


218



250



468Thereafter


44



8



52$
3,897


$
1,365


$
5,262     Utilized


AvailableCapacity(1)


Capacity


Capacity(In millions)Asset-Backed Funding ArrangementsVehicle
    management(2)

$
2,892


$
2,892


$
Mortgage
    warehouse(3)


1,885



996



889Unsecured Committed Credit
    Facilities(4)


1,305



448



857     (1)
    
    Capacity is dependent upon
    maintaining compliance with, or obtaining waivers of, the terms,
    conditions and covenants of the respective agreements. With
    respect to asset-backed funding arrangements, capacity may be
    further limited by the asset eligibility requirements under the
    respective agreements.(2)
    
    On February 27, 2009, the
    Amortization Period of the
    Series 2006-2
    notes began during which time we are unable to borrow additional
    amounts under these notes. Amounts outstanding under the
    Series 2006-2
    notes were $657 million as of December 31, 2009. The
    Chesapeake Term Notes have revolving periods during which time
    the pro-rata share of lease cash flows pledged to Chesapeake
    will create availability to fund the acquisition of vehicles to
    be leased to customers of our Fleet Management Services segment.
    See Asset-Backed DebtVehicle Management Asset-Backed
    Debt above for additional information.(3)
    
    Capacity does not reflect
    $2.7 billion undrawn under the $3.0 billion Fannie Mae
    Repurchase Facilities, as these facilities are uncommitted.(4)
    
    Utilized capacity reflects
    $16 million of letters of credit issued under the Amended
    Credit Facility, which are not included in Debt in our
    accompanying Consolidated Balance Sheet.  Debt
    Covenants
     77




---



##### Table of Contents



Restrictions
    on Paying Dividends
    Contractual
    Obligations
    2010


2011


2012


2013


2014


Thereafter


Total(In millions)Asset-backed
    debt(1)(2)

$
1,682


$
906


$
669


$
378


$
218


$
44


$
3,897Unsecured
    debt(1)(3)


5



432



250



420



250



8



1,365Operating
    leases(4)


18



17



16



14



11



74



150Capital
    leases(1)


1



1



















2Other purchase
    commitments
    (5)(6)


96



1



















97$
1,802


$
1,357


$
935


$
812


$
479


$
126


$
5,511     (1)
    
    The table above excludes future
    cash payments related to interest expense. Interest payments
    during 2009 totaled $164 million. Interest is calculated on
    most of our debt obligations based on variable rates referenced
    to LIBOR or other short-term interest rate indices. A portion of
    our interest cost related to vehicle management asset-backed
    debt is charged to lessees pursuant to lease agreements.(2)
    
    Represents the contractual
    maturities for asset-backed debt arrangements as of
    December 31, 2009, except for our vehicle management
    asset-backed notes, where estimated payments have been used
    based on the expected cash inflows related to the securitized
    vehicle leases and related assets. See
     Liquidity and Capital
    ResourcesIndebtedness and Note 11, Debt
    and Borrowing Arrangements in the accompanying Notes to
    Consolidated Financial Statements included in this
    Form 10-K. 78




---



##### Table of Contents



(3)
    
    Represents the contractual
    maturities for unsecured debt arrangements as of
    December 31, 2009. See  Liquidity and
    Capital ResourcesIndebtedness and Note 11,
    Debt and Borrowing Arrangements in the accompanying
    Notes to Consolidated Financial Statements included in this
    Form 10-K.(4)
    
    Includes operating leases for our
    Mortgage Production and Servicing segments in Mt. Laurel, New
    Jersey; Jacksonville, Florida and other smaller regional
    locations throughout the U.S. Also includes leases for our Fleet
    Management Services segment for its headquarters office in
    Sparks, Maryland, office space and marketing centers in five
    locations in Canada and four smaller regional locations
    throughout the U.S. See Note 14, Commitments and
    Contingencies in the accompanying Notes to Consolidated
    Financial Statements included in this
    Form 10-K.(5)
    
    Includes various commitments to
    purchase goods or services from specific suppliers made by us in
    the ordinary course of our business, including those related to
    capital expenditures. See Note 14, Commitments and
    Contingencies in the accompanying Notes to Consolidated
    Financial Statements included in this
    Form 10-K.(6)
    
    Excludes our liability for
    unrecognized income tax benefits, which totaled $8 million
    as of December 31, 2009, since we cannot predict with
    reasonable certainty or reliability of the timing of cash
    settlements to the respective taxing authorities for these
    estimated contingencies. See Note 1, Summary of
    Significant Accounting Policies in the accompanying Notes
    to Consolidated Financial Statements included in this
    Form 10-K
    for more information regarding our liability for unrecognized
    income tax benefits.  agreed-upon
    Form 10-K.
  Off-Balance
    Sheet Arrangements and Guarantees
    Critical
    Accounting Policies
   79




---



##### Table of Contents



Fair
    Value Measurements
             80




---



##### Table of Contents



Mortgage
    Servicing Rights
      Mortgage
    Loans Held for Sale
   81




---



##### Table of Contents



Goodwill
    Form 10-K.
  Income
    Taxes
   82




---



##### Table of Contents



and/or
    Recently
    Issued Accounting Pronouncements
  Form 10-K.
 83




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Interest
    Rate Risk
  Mortgage
    Servicing Rights
    Other
    Mortgage-Related Assets
    Indebtedness
    Consumer
    Credit Risk
  Loan
    Recourse
   84




---



##### Table of Contents



Mortgage
    Loans in Foreclosure
    Real
    Estate Owned
    Mortgage
    Reinsurance
   85




---



##### Table of Contents



Year of Origination2003andPrior


2004


2005


2006


2007


2008


2009


Total(Dollars in millions)Unpaid principal
    balance(1)

$
1,994


$
1,142


$
1,084


$
724


$
1,465


$
2,577


$
484


$
9,470Unpaid principal balance as a percentage of original unpaid
    principal
    balance(1)


10
%


32
%


51
%


61
%


79
%


86
%


98
%


N/AMaximum potential exposure to reinsurance
    losses(1)

$
295


$
104


$
62


$
31


$
49


$
63


$
7


$
611Average FICO
    score(2)


697



693



696



693



701



727



759



708Delinquencies(2)(3)


7.20
%


6.76
%


8.54
%


9.78
%


8.84
%


4.17
%


0.00
%


6.67
%Foreclosures/REO/
    bankruptcies(2)(4)


3.84
%


6.49
%


8.97
%


12.34
%


8.93
%


1.81
%


0.00
%


5.55
%     (1)
    
    As of December 31, 2009.(2)
    
    Calculated based on
    September 30, 2009 data.(3)
    
    Represents delinquent mortgage
    loans for which payments are 60 days or more outstanding as
    a percentage of the total unpaid principal balance.(4)
    
    Calculated as a percentage of the
    total unpaid principal balance.    Form 10-K.
  Commercial
    Credit Risk
    Counterparty
    Credit Risk
  and/or
 86




---



##### Table of Contents



Sensitivity
    Analysis
           87




---



##### Table of Contents



Change in Fair ValueDown


Down


Down


Up


Up


Up100 bps


50 bps


25 bps


25 bps


50 bps


100 bps(In millions)Mortgage assets:Mortgage loans held for sale

$
34


$
24


$
13


$
(15
)

$
(32
)

$
(69
)Interest rate lock commitments


62



47



26



(33
)


(71
)


(153
)Forward loan sale commitments


(123
)


(79
)


(42
)


49



102



212Total Mortgage loans held for sale, interest rate lock
    commitments and related derivatives


(27
)


(8
)


(3
)


1



(1
)


(10
)Mortgage servicing rights


(500
)


(210
)


(92
)


74



135



225Total mortgage assets


(527
)


(218
)


(95
)


75



134



215Total vehicle assets


17



9



4



(4
)


(8
)


(17
)Total liabilities


(26
)


(13
)


(6
)


7



13



26Total, net

$
(536
)

$
(222
)

$
(97
)

$
78


$
139


$
224  88




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Index to
    the Consolidated Financial Statements
  PageReport of Independent Registered Public
    Accounting Firm


90Consolidated Statements of Operations


91Consolidated Balance Sheets


92Consolidated Statements of Changes in Equity


93Consolidated Statements of Cash Flows


95Notes to Consolidated Financial Statements


97Note 1. Summary of Significant Accounting
    Policies


97Note 2. Earnings (Loss) Per Share


106Note 3. Goodwill and Other Intangible
    Assets


107Note 4. Mortgage Servicing Rights


108Note 5. Loan Servicing Portfolio


110Note 6. Mortgage Loan Sales


111Note 7. Derivatives and Risk Management
    Activities


114Note 8. Vehicle Leasing Activities


118Note 9. Property, Plant and Equipment,
    Net


119Note 10. Accounts Payable and Accrued
    Expenses


119Note 11. Debt and Borrowing Arrangements


120Note 12. Pension and Other Post Employment
    Benefits


127Note 13. Income Taxes


128Note 14. Commitments and Contingencies


131Note 15. Stock-Related Matters


135Note 16. Accumulated Other Comprehensive
    Income (Loss)


136Note 17. Stock-Based Compensation


136Note 18. Fair Value Measurements


141Note 19. Variable Interest Entities


147Note 20. Related Party Transactions


151Note 21. Segment Information


152Note 22. Selected Quarterly Financial
    Data(unaudited)


154Note 23. Subsequent Events


154Schedules:Schedule ICondensed Financial
    Information of Registrant


155Schedule IIValuation and Qualifying
    Accounts


162  89




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Internal ControlIntegrated Framework
  
    90




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
    OPERATIONS
    (In millions, except per share data)
  Year Ended December 31,2009


2008


2007RevenuesMortgage fees

$
275


$
208


$
127Fleet management fees


150



163



164Net fee income


425



371



291Fleet lease income


1,441



1,585



1,598Gain on mortgage loans, net


610



259



94Mortgage interest income


89



173



351Mortgage interest expense


(147
)


(171
)


(267
)Mortgage net finance (expense) income


(58
)


2



84Loan servicing income


431



430



489Change in fair value of mortgage servicing rights


(280
)


(554
)


(509
)Net derivative (loss) gain related to mortgage servicing rights






(179
)


96Valuation adjustments related to mortgage servicing rights, net


(280
)


(733
)


(413
)Net loan servicing income (loss)


151



(303
)


76Other income


37



142



97Net revenues


2,606



2,056



2,240ExpensesSalaries and related expenses


482



440



326Occupancy and other office expenses


59



74



77Depreciation on operating leases


1,267



1,299



1,264Fleet interest expense


89



162



213Other depreciation and amortization


26



25



29Other operating expenses


403



438



376Goodwill impairment






61



Total expenses


2,326



2,499



2,285Income (loss) before income taxes


280



(443
)


(45
)Provision for (benefit from) income taxes


107



(162
)


(35
)Net income (loss)


173



(281
)


(10
)Less: net income (loss) attributable to noncontrolling interest


20



(27
)


2Net income (loss) attributable to PHH Corporation

$
153


$
(254
)

$
(12
)Basic earnings (loss) per share attributable to PHH
    Corporation

$
2.80


$
(4.68
)

$
(0.23
)Diluted earnings (loss) per share attributable to PHH
    Corporation

$
2.77


$
(4.68
)

$
(0.23
)    91




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
    (In millions, except share data)
  December 31,2009


2008ASSETSCash and cash equivalents

$
150


$
109Restricted cash


596



614Mortgage loans held for sale


1,218



1,006Accounts receivable, net of allowance for doubtful accounts of
    $6 and $6


469



468Net investment in fleet leases


3,610



4,204Mortgage servicing rights


1,413



1,282Investment securities


12



37Property, plant and equipment, net


49



63Goodwill


25



25Other assets


581



465Total assets

$
8,123


$
8,273LIABILITIES AND EQUITYAccounts payable and accrued expenses

$
495


$
451Debt


5,160



5,764Deferred income taxes


702



579Other liabilities


262



212Total liabilities


6,619



7,006Commitments and contingencies (Note 14)






EQUITYPreferred stock, $0.01 par value; 1,090,000 shares
    authorized at December 31, 2009 and 2008; none issued or
    outstanding at December 31, 2009 or 2008






Common stock, $0.01 par value; 273,910,000 and
    108,910,000 shares authorized at December 31, 2009 and
    2008, respectively; 54,774,639 shares issued and
    outstanding at December 31, 2009; 54,256,294 shares
    issued and outstanding at December 31, 2008


1



1Additional paid-in capital


1,056



1,005Retained earnings


416



263Accumulated other comprehensive income (loss)


19



(3
)Total PHH Corporation stockholders equity


1,492



1,266Noncontrolling interest


12



1Total equity


1,504



1,267Total liabilities and equity

$
8,123


$
8,273    92




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES
    IN EQUITY
    (In millions, except share data)
  PHH Corporation StockholdersAccumulatedOtherAdditional





ComprehensiveCommon Stock


Paid-In


Retained


Income


Noncontrolling


TotalShares


Amount


Capital


Earnings


(Loss)


Interest


EquityBalance at December 31, 2006


53,506,822


$
1


$
961


$
540


$
13


$
31


$
1,546Effect of adoption of updates to ASC 740














(1
)










(1
)Comprehensive income:Net (loss) income














(12
)






2Currency translation adjustment


















17



Unrealized losses on
    available-for-sale
    securities, net of income taxes of $(2)


















(3
)


Reclassification of realized holding gains on sales of
    available-for-sale
    securities, net of income taxes of $1


















1



Change in unfunded pension liability, net of income taxes of $1


















1



Total comprehensive income














(12
)


16



2



6Contributions from noncontrolling interest






















3



3Distributions to noncontrolling interest






















(4
)


(4
)Stock compensation expense










6















6Stock options exercised, including excess tax benefit
    of $(1)


323,186







7















7Restricted stock award vesting, net of excess tax benefit of $(1)


248,629







(2
)














(2
)Balance at December 31, 2007


54,078,637


$
1


$
972


$
527


$
29


$
32


$
1,561Adjustments to distributions of assets and liabilities to
    Cendant related to the Spin-Off














4











4Effect of adoption of ASC 820 and ASC 825, net of income taxes
    of $(10)














(14
)










(14
)Comprehensive loss:Net loss














(254
)






(27
)Currency translation adjustment


















(26
)


Change in unfunded pension liability, net of income taxes of $(4)


















(6
)


Total comprehensive loss














(254
)


(32
)


(27
)


(313
)Distributions to noncontrolling interest






















(4
)


(4
)Proceeds on sale of 2012 Sold Warrants (Note 11)










24















24Reclassification of 2012 Purchased Options and 2012 Conversion
    Option, net of income taxes of $(1) (Note 11)










(1
)














(1
)Stock compensation expense










11















11Stock options exercised, including excess tax benefit of $0


28,765







1















1Restricted stock award vesting, net of excess tax benefit
    of $0


148,892







(2
)














(2
)Balance at December 31, 2008


54,256,294


$
1


$
1,005


$
263


$
(3
)

$
1


$
1,267    93




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF CHANGES IN EQUITY(Continued)
    (In millions, except share data)
  PHH Corporation StockholdersAccumulatedOtherAdditional





ComprehensiveCommon Stock


Paid-In


Retained


(Loss)


Noncontrolling


TotalShares


Amount


Capital


Earnings


Income


Interest


EquityBalance at December 31, 2008 
    (continued from previous page)


54,256,294


$
1


$
1,005


$
263


$
(3
)

$
1


$
1,267Comprehensive income:Net income














153







20Currency translation adjustment


















21



Change in unfunded pension liability, net of income taxes of $1


















1



Total comprehensive income














153



22



20



195Distributions to noncontrolling interest






















(9
)


(9
)Proceeds on sale of 2014 Sold Warrants (Note 11)










35















35Stock compensation expense










13















13Stock options exercised, including excess tax benefit of $0


302,760







4















4Restricted stock award vesting, net of excess tax benefit of $0


215,585







(1
)














(1
)Balance at December 31, 2009


54,774,639


$
1


$
1,056


$
416


$
19


$
12


$
1,504    94




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
    FLOWS
    (In millions)
  Year Ended December 31,2009


2008


2007Cash flows from operating activities:Net income (loss)

$
173


$
(281
)

$
(10
)Adjustments to reconcile Net income (loss) to net cash provided
    by operating activities:Goodwill impairment charge






61



Capitalization of originated mortgage servicing rights


(496
)


(328
)


(433
)Net unrealized loss on mortgage servicing rights and related
    derivatives


280



733



413Vehicle depreciation


1,267



1,299



1,264Other depreciation and amortization


26



25



29Origination of mortgage loans held for sale


(29,592
)


(20,580
)


(29,320
)Proceeds on sale of and payments from mortgage loans held for
    sale


29,930



21,252



30,643Net (gain) loss on interest rate lock commitments, mortgage
    loans held for sale and related derivatives


(638
)


(190
)


54Deferred income tax provision (benefit)


123



(118
)


(69
)Other adjustments and changes in other assets and liabilities,
    net


210



20



92Net cash provided by operating activities


1,283



1,893



2,663Cash flows from investing activities:Investment in vehicles


(1,073
)


(1,959
)


(2,255
)Proceeds on sale of investment vehicles


418



532



869Purchase of mortgage servicing rights


(1
)


(6
)


(40
)Proceeds on sale of mortgage servicing rights and excess
    servicing


92



179



235Cash paid on derivatives related to mortgage servicing rights






(129
)


(252
)Net settlement proceeds from derivatives related to mortgage
    servicing rights






18



280Purchases of property, plant and equipment


(11
)


(21
)


(23
)Decrease (increase) in Restricted cash


18



(35
)


(20
)Other, net


7



13



Net cash used in investing activities


(550
)


(1,408
)


(1,206
)Cash flows from financing activities:Net decrease in short-term borrowings






(133
)


(992
)Proceeds from borrowings


44,347



30,291



23,684Principal payments on borrowings


(44,913
)


(30,627
)


(24,108
)Issuances of Company Common stock


4



1



6Proceeds from the sale of Sold Warrants (Note 11)


35



24



Cash paid for Purchased Options (Note 11)


(66
)


(51
)


Cash paid for debt issuance costs


(54
)


(54
)


(17
)Other, net


(8
)


(4
)


(5
)Net cash used in financing activities

$
(655
)

$
(553
)

$
(1,432
)    95




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)
    (In millions)
  Year Ended December 31,2009


2008


2007Effect of changes in exchange rates on Cash and cash
    equivalents

$
(37
)

$
28


$
1Net increase (decrease) in Cash and cash equivalents


41



(40
)


26Cash and cash equivalents at beginning of period


109



149



123Cash and cash equivalents at end of period

$
150


$
109


$
149Supplemental Disclosure of Cash Flows Information:Interest payments

$
164


$
292


$
487Income tax (refunds) payments, net


(21
)


28



(13
)    96




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  1.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
    §
    Mortgage Production provides mortgage loan
    origination services and sells mortgage loans.§
    Mortgage Servicing performs servicing
    activities for originated and purchased loans.§
    Fleet Management Services provides commercial
    fleet management services.      Changes
    In Accounting Policies
  Fair Value Measurements.
   97




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Balance





BalanceJanuary 1, 2008


Transition


January 1, 2008Prior to Adoption


Adjustment


After Adoption(In millions)Derivative assets

$
177


$
(3
)

$
174Derivative liabilities


121



(12
)


133Income tax benefit






6Cumulative-effect adjustment, net of income taxes





$
(9
)     No. 2009-05, No. 2009-05), No. 2009-05 No. 2009-05 No. 2009-05
  Fair Value Option.
     98




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  available-for-sale available-for-sale
    Balance





BalanceJanuary 1, 2008


Transition


January 1, 2008Prior to Adoption


Adjustment


After Adoption(In millions)Mortgage loans held for sale

$
1,564


$
(4
)

$
1,560Accounts receivable, net


686



(5
)


681Income tax benefit






4Cumulative-effect adjustment, net of income taxes





$
(5
)   Noncontrolling Interests.
  Written Loan Commitments.
 99




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Recently
    Issued Accounting Pronouncements
  Transfers of Financial Assets. available-for-sale
  Consolidation of Variable Interest
    Entities.
  Revenue Recognition. No. 2009-13, No. 2009-13), No. 2009-13 No. 2009-13 No. 2009-13
  Fair Value Measurements.
 100




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    Recognition
  Mortgage Production.
        Mortgage Servicing.
 101




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fleet Leasing Services. month-to-month month-to-month month-to-month
      Depreciation
    on Operating Leases and Net Investment in Fleet
    Leases
    Advertising
    Expenses
   102




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Income
    Taxes
      Cash
    and Cash Equivalents
    Restricted
    Cash
  and/or
  Mortgage
    Loans Held for Sale
   103




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Mortgage
    Servicing Rights
      Property,
    Plant and Equipment
     104




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Acquisitions
    Goodwill
    and Other Intangible Assets
      20-year
    Derivative
    Instruments
       105




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Impairment
    or Disposal of Long-Lived Assets
    Custodial
    Accounts
    Subsequent
    Events
    2.
    Earnings
    (Loss) Per Share   106




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2009


2008


2007(In millions, except share and per share data)Net income (loss) attributable to PHH Corporation

$
153


$
(254
)

$
(12
)Weighted-average common shares outstanding  basic


54,625,178



54,284,089



53,938,844Effect of potentially dilutive securities:Stock options


49,143







Restricted stock units


541,113







Weighted-average common shares outstanding  diluted


55,215,434



54,284,089



53,938,844Basic earnings (loss) per share attributable to PHH Corporation

$
2.80


$
(4.68
)

$
(0.23
)Diluted earnings (loss) per share attributable to PHH Corporation

$
2.77


$
(4.68
)

$
(0.23
)   3.
    Goodwill
    and Other Intangible Assets    December 31, 2009


December 31, 2008Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


Amount(In millions)Amortized Intangible Assets:Customer lists

$
40


$
18


$
22


$
40


$
16


$
24Other


13



12



1



13



12



1$
53


$
30


$
23


$
53


$
28


$
25Unamortized Intangible Assets:Goodwill

$
25










$
25Trademarks


15











15$
40










$
40     FleetManagement


MortgageServices


Production


Total(In millions)Goodwill at January 1, 2008

$
25


$
61


$
86Goodwill impairment during 2008






(61
)


(61
)Goodwill at December 31, 2009 and 2008

$
25


$



$
25    107




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2009


2008


2007(In millions)Customer lists

$
2


$
2


$
3Other






1



1$
2


$
3


$
4     4.
    Mortgage
    Servicing Rights    Year Ended December 31,2009


2008


2007(In millions)Balance, beginning of period

$
129,078


$
126,540


$
146,836Additions


27,739



20,156



32,316Payoffs, sales and
    curtailments(1)


(29,117
)


(17,618
)


(52,612
)Balance, end of period

$
127,700


$
129,078


$
126,540     (1)
    
    Payoffs, sales and curtailments
    during the year ended December 31, 2007 includes
    $29.2 billion of the unpaid principal balance of the
    underlying mortgage loans for which the associated MSRs were
    sold. 108




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2009


2008


2007(In millions)Mortgage Servicing Rights:Balance, beginning of period

$
1,282


$
1,502


$
1,971Additions


497



334



473Changes in fair value due to:Realization of expected cash flows


(391
)


(267
)


(315
)Changes in market inputs or assumptions used in the valuation
    model


111



(287
)


(194
)Sales


(86
)






(433
)Balance, end of period

$
1,413


$
1,282


$
1,502     December 31,2009

2008Prepayment speed (CPR)


16%


19%Option adjusted spread (in basis points)


587


456Volatility


30%


29%     Year Ended December 31,2009


2008


2007(In millions)Net service fee revenue

$
422


$
431


$
494Late fees


18



20



21Other ancillary servicing
    revenue(1)


40



23



     (1)
    
    Includes a $3 million gain on
    the sale of excess servicing during the year ended
    December 31, 2009 and realized net losses of
    $21 million, including direct expenses, on the sale of
    $433 million of MSRs during the year ended
    December 31, 2007.      Year Ended December 31,2009

2008Initial capitalization rate of additions to MSRs


1.79%


1.66%Weighted-average servicing fee of additions to MSRs (in basis
    points)


33


36   109




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2009

2008Capitalized servicing rate


1.11%


0.99%Capitalized servicing multiple


3.6


3.0Weighted-average servicing fee (in basis points)


31


33   5.
    Loan
    Servicing Portfolio    Portfolio
    Activity
  Year Ended December 31,2009


2008


2007(In millions)Balance, beginning of period

$
149,750


$
159,183


$
160,222Additions


33,892



28,693



35,350Payoffs, sales and
    curtailments(1)


(32,161
)


(38,126
)


(36,389
)Balance, end of
    period(2)

$
151,481


$
149,750


$
159,183   Portfolio
    Composition
  December 31,2009


2008(In millions)Owned servicing portfolio

$
129,663


$
130,572Subserviced portfolio


21,818



19,178Total servicing portfolio

$
151,481


$
149,750Fixed rate

$
102,036


$
94,066Adjustable rate


49,445



55,684Total servicing portfolio

$
151,481


$
149,750Conventional loans

$
129,840


$
132,347Government loans


14,872



10,905Home equity lines of credit


6,769



6,498Total servicing portfolio

$
151,481


$
149,750Weighted-average interest rate


5.3
%


5.8
%  110




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Portfolio
    Delinquency(3)
  December 31,2009


2008Number


Unpaid


Number


Unpaidof Loans


Balance


of Loans


Balance30 days


2.57
%


2.26
%


2.61
%


2.31
%60 days


0.73
%


0.69
%


0.67
%


0.62
%90 or more days


1.62
%


1.73
%


0.75
%


0.74
%Total delinquency


4.92
%


4.68
%


4.03
%


3.67
%Foreclosure/real estate owned/bankruptcies


2.80
%


2.84
%


1.90
%


1.83
%     (1)
    
    Payoffs, sales and curtailments for
    the year ended December 31, 2008 includes
    $18.3 billion of the unpaid principal balance of the
    underlying mortgage loans for which the associated MSRs were
    sold during the year ended December 31, 2007, but the
    Company subserviced these loans until the MSRs were transferred
    from the Companys system to the purchasers systems
    during the second quarter of 2008.(2)
    
    During the year ended
    December 31, 2007, the Company sold the MSRs associated
    with $19.3 billion of the unpaid principal balance of
    underlying mortgage loans; however, because the Company
    subserviced these loans until the MSRs were transferred from the
    Companys systems to the purchasers systems in the
    second quarter of 2008, these loans were included in the
    Companys mortgage loan servicing portfolio balance as of
    December 31, 2007.(3)
    
    Represents the loan servicing
    portfolio delinquencies as a percentage of the total number of
    loans and the total unpaid balance of the portfolio.    6.
    Mortgage
    Loan Sales    and/or
   111




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          InvestmentSecurities


MSRs(Dollars in millions)Fair value of retained interests

$
12


$
1,413Weighted-average life (in years)


8.3



5.3Weighted-average servicing fee (in basis points)


N/A



31Prepayment speed (annual rate)


9
%


16
%Impact on fair value of 10% adverse change

$



$
(74
)Impact on fair value of 20% adverse change


(1
)


(142
)Discount rate/Option adjusted spread (annual rate and basis
    points, respectively)


21-30
%


587Impact on fair value of 10% adverse change

$
(1
)

$
(57
)Impact on fair value of 20% adverse change


(2
)


(110
)Volatility (annual rate)


N/A



30
%Impact on fair value of 10% adverse change


N/A


$
(28
)Impact on fair value of 20% adverse change


N/A



(57
)Credit losses (cumulative rate)


9
%


N/AImpact on fair value of 10% adverse change

$
(1
)


N/AImpact on fair value of 20% adverse change


(2
)


N/A    112




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    PrincipalTotal

Amount 60Principal

Days or More

Net CreditAmount

Past
    Due(1)

Losses(In millions)Residential mortgage
    loans(2)

$
94


$
3


$
8     (1)
    
    Amounts are based on total sold or
    securitized assets at December 31, 2009 for which the
    Company has a retained interest as of December 31, 2009.(2)
    
    Excludes sold or securitized
    mortgage loans that the Company continues to service but to
    which it has no other continuing involvement.    Year Ended December 31,2009


2008


2007(In millions)Proceeds from new loan sales or securitizations

$
28,000


$
19,049


$
27,588Servicing fees
    received(1)


422



431



494Other cash flows received on retained
    interests(2)


4



12



4Purchases of delinquent or foreclosed loans


(104
)


(102
)


(136
)Servicing advances


(1,085
)


(735
)


(605
)Repayment of servicing advances


1,050



678



591     (1)
    
    Excludes late fees and other
    ancillary servicing revenue.(2)
    
    Represents cash flows received on
    retained interests other than servicing fees.   113




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Derivatives
    and Risk Management Activities    Asset Derivatives


Liability DerivativesBalance







BalanceSheet

Fair


Notional


Sheet

Fair


NotionalPresentation

Value


Amount


Presentation

Value


Amount(In millions)Interest rate lock commitments

Other
    assets

$
31


$
3,507


Other
    liabilities

$
5


$
934Forward delivery commitments not subject to master netting
    arrangements:Related to interest rate and price risk for MLHS and IRLCs

Other
    assets


44



3,121


Other
    liabilities


9



855Forward delivery commitments subject to master netting
    arrangements(1):Related to interest rate and price risk for MLHS and IRLCs

Other
    assets


34



2,415


Other
    assets


4



483Contracts related to interest rate risk for debt arrangements
    and variable-rate leases

Other
    assets


8



911


N/A






Derivative instruments related to the issuance of the 2014
    Convertible
    Notes(2)

Other
    assets


37






Other
    liabilities


37



Foreign exchange contracts

N/A









Other
    liabilities


2



285Total derivative instruments




154









57Impact of master netting
    arrangements(1)




(4
)








(4
)Cash collateral




(6
)








(1
)Net fair value of derivative instruments



$
144








$
52     (1)
    
    Represents derivative instruments
    that are executed with the same counterparties and subject to
    master netting arrangements between the Company and its
    counterparties.(2)
    
    The notional amount of the
    derivative instruments related to the issuance of the 2014
    Convertible Notes represents 9.6881 million shares of the
    Companys Common stock at December 31, 2009.    Year EndedDecember 31, 2009Statement ofOperationsPresentation

Gain (Loss)(In millions)Interest rate lock commitments

Gain on
    mortgage loans, net

$
667Forward delivery commitments related to interest rate and price
    risk for MLHS and IRLCs

Gain on
    mortgage
    loans, net


(30
)Contracts related to interest rate risk for debt arrangements
    and variable-rate leases

Fleet
    interest expense


(3
)Foreign exchange contracts

Fleet interest
    expense


41Total derivative instruments



$
675  114




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Market
    Risk
      Interest Rate Lock Commitments. commitment-to-closing
  Mortgage Loans Held for Sale.
  Mortgage Servicing Rights.
   115




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Debt.
    Foreign Exchange.
 116




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Credit
    Risk and Exposure
      and/or
   117




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Vehicle
    Leasing Activities    December 31,2009


2008(In millions)Operating Leases:Vehicles under open-end operating leases

$
7,446


$
7,542Vehicles under closed-end operating leases


263



266Vehicles under operating leases


7,709



7,808Less: Accumulated depreciation


(4,382
)


(3,999
)Net investment in operating leases


3,327



3,809Direct Financing Leases:Lease payments receivable


121



141Less: Unearned income


(4
)


(7
)Net investment in direct financing leases


117



134Off-Lease Vehicles:Vehicles not yet subject to a lease


164



254Vehicles held for sale


9



18Less: Accumulated depreciation


(7
)


(11
)Net investment in off-lease vehicles


166



261Net investment in fleet leases

$
3,610


$
4,204   December 31,2009


2008Vehicles under open-end leases


95
%


94
%Vehicles under closed-end leases


5
%


6
%Vehicles under variable-rate leases


76
%


73
%Vehicles under fixed-rate leases


24
%


27
%     Future MinimumLease
    Payments(1)DirectOperating


FinancingLeases


Leases(In millions)2010

$
688


$
222011


42



42012


32



42013


24



22014


16



Thereafter


13



$
815


$
32  118




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    Amounts included for the interest
    component of the future minimum lease payments are based on the
    interest rate in effect at the inception of each lease. Any
    changes in the interest rates associated with variable-rate
    leases in periods subsequent to the inception of the lease are
    used to calculate contingent rentals. Contingent rentals from
    operating leases were $(9) million and $(16) million
    for the years ended December 31, 2009 and 2008,
    respectively. Contingent rentals from operating leases were not
    significant for the year ended December 31, 2007.
    Contingent rentals from direct financing leases were not
    significant for the years ended December 31, 2009, 2008 and
    2007.    9.
    Property,
    Plant and Equipment, Net    December 31,2009


2008(In millions)Furniture, fixtures and equipment

$
76


$
80Capitalized software


119



112Building and leasehold improvements


10



10205



202Less: Accumulated depreciation and amortization


(156
)


(139
)$
49


$
63   10.
    Accounts
    Payable and Accrued Expenses    December 31,2009


2008(In millions)Accounts payable

$
241


$
242Accrued interest


20



23Accrued payroll and
    benefits(1)


59



38Other


175



148$
495


$
451     (1)
    
    Accrued payroll and benefits as of
    December 31, 2009 included a $10 million accrued
    employee severance liability associated with the Companys
    transformation effort to create a cost efficient and highly
    scalable operating platform, which began in 2009. 119




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Debt
    and Borrowing Arrangements    December 31, 2009Assets Held as
    Collateral(1)Mortgage


NetMaturity/








Loans


InvestmentInterest


Expiry


Accounts


Restricted


Held for


in FleetBalance


Capacity(2)


Rate(3)


Date(4)


Receivable


Cash


Sale


Leases(5)(Dollars in millions)Chesapeake
    Series 2006-2
    Variable Funding Notes

$
657


$
657







2/26/2009
(6)Chesapeake
    Series 2009-1
    Term Notes


1,000



1,000







5/20/2010Chesapeake
    Series 2009-2
    Class A Term Notes


850



850







2/17/2011Chesapeake
    Series 2009-2
    Class B Term
    Notes(7)


28



28







2/17/2011Chesapeake
    Series 2009-2
    Class C Term
    Notes(7)


24



24







2/17/2011Chesapeake
    Series 2009-3
    Class A Term Notes


50



50







10/20/2011Chesapeake
    Series 2009-4
    Class A Term Notes


250



250







2/18/2010Other


33



33







3/2010-
    6/2016Total Vehicle Management Asset-Backed Debt


2,892



2,892



2.0
%(8)





$
21


$
297


$



$
3,082RBS Repurchase
    Facility(9)


622



1,500



3.0
%


6/24/2010







1



667



Fannie Mae Repurchase
    Facilities(10)


325



325



1.0
%


N/A











333



9/2010-Other(11)


49



60



2.7
%


10/2010



52







5



Total Mortgage Warehouse Asset-Backed Debt


996



1,885











52



1



1,005



Term
    Notes(12)


439



439



6.57.9
%-
    %(13)


4/2010-
    4/2018















Credit
    Facilities(14)


432



1,305



1.0
%(15)


1/6/2011















Convertible Notes due
    2012(16)


221



221



4.0
%


4/15/2012















Convertible Notes due
    2014(17)


180



180



4.0
%


9/1/2014















Total Unsecured Debt


1,272



2,145























Total Debt

$
5,160


$
6,922










$
73


$
298


$
1,005


$
3,082   120




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2008Assets Held as
    Collateral(1)Mortgage


NetMaturity/








Loans


InvestmentInterest


Expiry


Accounts


Restricted


Held for


in FleetBalance


Capacity(2)


Rate(3)


Date


Receivable


Cash


Sale


Leases(5)(Dollars in millions)Chesapeake
    Series 2006-1
    Variable Funding Notes

$
2,371


$
2,500







2/26/2009Chesapeake
    Series 2006-2
    Variable Funding Notes


1,000



1,000







2/26/2009Other


5



5







3/2010-
    5/2014Total Vehicle Management Asset-Backed Debt


3,376



3,505



3.6
%(8)





$
22


$
320


$



$
3,692RBS Repurchase
    Facility(9)


411



1,500



4.0
%


6/24/2010











456



Citigroup Repurchase
    Facility(18)


10



500



1.7
%


2/26/2009











12



Fannie Mae Repurchase
    Facilities(10)


149



149



1.0
%


N/A











149



Mortgage Venture Repurchase
    Facility(19)


115



225



1.7
%


5/28/2009







25



128



Other(11)


7



7



5.3
%


10/29/2009











7



Total Mortgage Warehouse Asset-Backed Debt


692



2,381















25



752



6.5
%-


4/2010-Term
    Notes(12)


441



441



7.9
%(13)


4/2018















Credit
    Facilities(14)


1,035



1,303



1.3
%(15)


1/6/2011















Convertible Notes due
    2012(16)


208



208



4.0
%


4/15/2012















Other


12



12























Total Unsecured Debt


1,696



1,964























Total Debt

$
5,764


$
7,850










$
22


$
345


$
752


$
3,692     (1)
    
    Assets held as collateral are not
    available to pay the Companys general obligations.(2)
    
    Capacity is dependent upon
    maintaining compliance with, or obtaining waivers of, the terms,
    conditions and covenants of the respective agreements. With
    respect to asset-backed funding arrangements, capacity may be
    further limited by the availability of asset eligibility
    requirements under the respective agreements. The
    Series 2009-1,
    Series 2009-2,
    Series 2009-3
    and
    Series 2009-4
    notes (the Chesapeake Term Notes) have revolving
    periods during which time the pro-rata share of lease cash flows
    pledged to Chesapeake will create availability to fund the
    acquisition of vehicles to be leased to customers of the
    Companys Fleet Management Services segment. See
    Asset-Backed Debt  Vehicle Management
    Asset-Backed Debt below for additional information.(3)
    
    Represents the variable interest
    rate as of December 31 of the respective year, with the
    exception of total vehicle management asset-backed debt, term
    notes, the 2014 Convertible Notes and the 2012 Convertible Notes.(4)
    
    The maturity date for the
    Chesapeake Term Notes represents the end of the respective
    revolving period, during which time the respective notes
    pro-rata share of lease cash flows pledged to Chesapeake will
    create availability to fund the acquisition of vehicles to be
    leased to customers of our Fleet Management Services segment.
    Subsequent to the revolving period, the notes will amortize in
    accordance with their terms (as further discussed below). See
    Asset-Backed Debt  Vehicle Management
    Asset-Backed Debt below for additional information. 121




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (5)
    
    The titles to all the vehicles
    collateralizing the debt issued by Chesapeake Funding LLC
    (Chesapeake) are held in a bankruptcy remote trust
    and the Company acts as a servicer of all such leases. The
    bankruptcy remote trust also acts as a lessor under both
    operating and direct financing lease agreements.(6)
    
    The Company elected to allow the
    Series 2006-2
    notes to amortize in accordance with their terms on their
    Scheduled Expiry Date (as defined below). During the
    Amortization Period (as defined below), the Company is unable to
    borrow additional amounts under these notes. See
    Asset-Backed Debt  Vehicle Management
    Asset-Backed Debt below for additional information.(7)
    
    The carrying amount of the
    Chesapeake
    Series 2009-2
    Series B and Series C term notes as of
    December 31, 2009 is net of an unamortized discount of
    $3 million and $5 million, respectively. See
    Asset-Backed Debt  Vehicle Management
    Asset-Backed Debt below for additional information.(8)
    
    Represents the weighted-average
    interest rate of the Companys vehicle management
    asset-backed debt arrangements for the years ended
    December 31, 2009 and 2008, respectively.(9)
    
    The Company maintains a
    variable-rate committed mortgage repurchase facility (the
    RBS Repurchase Facility) with The Royal Bank of
    Scotland plc (RBS). At the Companys election,
    subject to compliance with the terms of the Amended Repurchase
    Agreement and payment of renewal fees, the RBS Repurchase
    Facility was renewed for an additional
    364-day term
    on June 25, 2009. See Asset-Backed Debt 
    Mortgage Warehouse Asset-Backed Debt below for additional
    information.(10)
    
    The balance and capacity represents
    amounts outstanding under the Companys variable-rate
    uncommitted mortgage repurchase facilities (the Fannie Mae
    Repurchase Facilities) with Fannie Mae. Total uncommitted
    capacity was approximately $3.0 billion and
    $1.5 billion as of December 31, 2009 and 2008,
    respectively.(11)
    
    Represents the variable interest
    rate on the majority of other mortgage warehouse asset-backed
    debt as of December 31, 2009 and 2008, respectively. The
    outstanding balance as of December 31, 2009 also includes
    $5 million outstanding under another variable-rate mortgage
    warehouse facility that bore interest at 3.1%.(12)
    
    Represents medium-term notes (the
    MTNs) publicly issued under the indenture, dated as
    of November 6, 2000 (as amended and supplemented, the
    MTN Indenture) by and between PHH and The Bank of
    New York, as successor trustee for Bank One Trust Company,
    N.A. During the year ended December 31, 2008, MTNs with a
    carrying value of $200 million were repaid upon maturity.(13)
    
    Represents the range of stated
    interest rates of the MTNs outstanding as of December 31,
    2009 and 2008, respectively. The effective rate of interest of
    the Companys outstanding MTNs was 7.2% as of both
    December 31, 2009 and 2008.(14)
    
    Credit facilities primarily
    represents a $1.3 billion Amended and Restated Competitive
    Advance and Revolving Credit Agreement (the Amended Credit
    Facility), dated as of January 6, 2006, among PHH, a
    group of lenders and JPMorgan Chase Bank, N.A., as
    administrative agent.(15)
    
    Represents the interest rate on the
    Amended Credit Facility as of December 31, 2009 and 2008,
    respectively, excluding per annum utilization and facility fees.
    The outstanding balance as of December 31, 2009 and 2008
    also includes $72 million and $78 million,
    respectively, outstanding under another variable-rate credit
    facility that bore interest at 1.0% and 2.8%, respectively. See
    Unsecured Debt  Credit Facilities below
    for additional information.(16)
    
    On April 2, 2008, the Company
    completed a private offering of the 4.0% Convertible Notes
    due 2012 (the 2012 Convertible Notes) with an
    aggregate principal amount of $250 million and a maturity
    date of April 15, 2012 to certain qualified institutional
    buyers. The carrying amount as of December 31, 2009 and
    2008 is net of an unamortized discount of $29 million and
    $42 million, respectively. The effective rate of interest
    of the 2012 Convertible Notes was 12.4% as of both
    December 31, 2009 and 2008, which represents the 4.0%
    semiannual cash payment and the non-cash accretion of discount
    and issuance costs. There were no conversions of the 2012
    Convertible Notes during the year ended December 31, 2009.
    See Unsecured Debt  Convertible Notes
    below for additional information.(17)
    
    On September 29, 2009, the
    Company completed a private offering of the
    4.0% Convertible Senior Notes due 2014 (the 2014
    Convertible Notes) with an aggregate principal balance of
    $250 million and a maturity date of September 1, 2014
    to certain qualified institutional buyers. The carrying amount
    as of December 31, 2009 is net of an unamortized discount
    of $70 million. The effective rate of interest of the 2014
    Convertible Notes was 13.0% as of December 31, 2009, which
    represents the 4.0% semiannual cash payment and the non-cash
    accretion of discount and issuance costs. There were no
    conversions of the 2014 Convertible Notes during the year ended
    December 31, 2009.(18)
    
    On February 28, 2008, the
    Company entered into a
    364-day
    $500 million variable-rate committed mortgage repurchase
    facility by executing a Master Repurchase Agreement and Guaranty
    with Citigroup Global Markets Realty Corp. (together, 122




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  the Citigroup Repurchase
    Facility). The Company repaid all outstanding obligations
    under the Citigroup Repurchase Facility as of February 26,
    2009.(19)
    
    The Mortgage Venture maintained a
    variable-rate committed repurchase facility (the Mortgage
    Venture Repurchase Facility) with Bank of Montreal and
    Barclays Bank PLC as Bank Principals and Fairway Finance
    Company, LLC and Sheffield Receivables Corporation as Conduit
    Principals. The balance as of December 31, 2008 represents
    variable-funding notes outstanding under the facility. See
    Asset-Backed Debt  Mortgage Warehouse
    Asset-Backed Debt below for additional information.    Asset-Backed
    Debt
  Vehicle
    Management Asset-Backed Debt
    Series 2006-1 Series 2006-1 Series 2006-2 Series 2006-1
  Series 2009-2, Series 2009-2 Series 2009-2 Series 2009-3 2009-4 Series 2006-1
     123




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Mortgage
    Warehouse Asset-Backed Debt
    Unsecured
    Debt
  Credit
    Facilities
    Convertible
    Notes
     124




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      st st th th
    Debt
    Maturities
   125




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Asset-Backed


Unsecured


Total(In millions)Within one year

$
1,682


$
5


$
1,687Between one and two years


906



432



1,338Between two and three years


669



250



919Between three and four years


378



420



798Between four and five years


218



250



468Thereafter


44



8



52$
3,897


$
1,365


$
5,262     Utilized


AvailableCapacity(1)


Capacity


Capacity(In millions)Asset-Backed Funding ArrangementsVehicle
    management(2)

$
2,892


$
2,892


$
Mortgage
    warehouse(3)


1,885



996



889Unsecured Committed Credit
    Facilities(4)


1,305



448



857     (1)
    
    Capacity is dependent upon
    maintaining compliance with, or obtaining waivers of, the terms,
    conditions and covenants of the respective agreements. With
    respect to asset-backed funding arrangements, capacity may be
    further limited by the asset eligibility requirements under the
    respective agreements.(2)
    
    On February 27, 2009, the
    Amortization Period of the
    Series 2006-2
    began during which time the Company is unable to borrow
    additional amounts under these notes. Amount outstanding under
    the
    Series 2006-2
    notes was $657 million as of December 31, 2009. The
    Chesapeake Term Notes have revolving periods during which time
    the pro-rata share of lease cash flows pledged to Chesapeake
    will create availability to fund the acquisition of vehicles to
    be leased by customers of the Companys Fleet Management
    Services segment. See Asset-Backed Debt 
    Vehicle Management Asset-Backed Debt above for additional
    information.(3)
    
    Capacity does not reflect
    $2.7 billion undrawn under the $3.0 billion Fannie Mae
    Repurchase Facilities, as these facilities are uncommitted.(4)
    
    Utilized capacity reflects
    $16 million of letters of credit issued under the Amended
    Credit Facility, which are not included in Debt in the
    Companys Consolidated Balance Sheet.  Debt
    Covenants
   126




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      12.
    Pension
    and Other Post Employment Benefits  Defined
    Contribution Savings Plans
    Defined
    Benefit Pension Plan and Other Employee Benefit
    Plan
      Other Post EmploymentPension Benefits


Benefits2009


2008


2009


2008(In millions)Benefit obligation  December 31

$
34


$
31


$
2


$
2Fair value of plan assets  December 31


27



21







Unfunded status


(7
)


(10
)


(2
)


(2
)Unfunded pension liability recorded in Accumulated other
    comprehensive income (loss):Net loss


12



15







Transition obligation














Net amount recognized  December 31

$
5


$
5


$
(2
)

$
(2
)    127




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      13.
    Income
    Taxes    Year Ended December 31,2009


2008


2007(In millions)Current:Federal

$
(28
)

$
(24
)

$
28State


1



(14
)


(4
)Foreign


11



7



16(16
)


(31
)


40Income Tax Contingencies:Change in income tax contingencies






(11
)


(8
)Interest and penalties






(2
)


2



(13
)


(6
)Deferred:Federal


109



(123
)


(56
)State


20



6



(8
)Foreign


(6
)


(1
)


(5
)123



(118
)


(69
)Provision for (benefit from) income taxes

$
107


$
(162
)

$
(35
)     Year Ended December 31,2009


2008


2007(In millions)Domestic operations

$
265


$
(465
)

$
(78
)Foreign operations


15



22



33Income (loss) before income taxes

$
280


$
(443
)

$
(45
)  128




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2009


2008(In millions)Deferred income tax assets:Accrued liabilities, provisions for losses and deferred income

$
60


$
76Federal loss carryforwards and credits


171



133State loss carryforwards and credits


69



81Alternative minimum tax credit carryforward


24



27Other


10



10Deferred income tax assets


334



327Valuation allowance


(70
)


(74
)Deferred income tax assets, net of valuation allowance


264



253Deferred income tax liabilities:Originated mortgage servicing rights


390



315Purchased mortgage servicing rights


43



19Depreciation and amortization


533



498Deferred income tax liabilities


966



832Net deferred income tax liability

$
702


$
579        129




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2009


2008


2007(In millions, except for percentages)Income (loss) before income taxes

$
280


$
(443
)

$
(45
)Statutory federal income tax rate


(35
)%


(35
)%


(35
)%Income taxes computed at statutory federal rate

$
98


$
(155
)

$
(16
)State and local income taxes, net of federal tax benefits


15



(22
)


(8
)Liabilities for income tax contingencies






(2
)


2Changes in state apportionment factors


2



(3
)


4Changes in valuation allowance


1



5



(20
)Non-deductible portion of Goodwill impairment






7



Noncontrolling interest


(9
)


10



(1
)Other






(2
)


4Provision for (benefit from) income taxes

$
107


$
(162
)

$
(35
)Calculated effective tax rate


38.3
%


(36.6
)%


(78.4
)%        130




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Balance, January 1, 2007 (prior to the adoption of updates
    to ASC 740)

$
27Effect of adoption of updates to ASC 740


1Current year activity related to tax positions taken during
    prior years


(6
)Balance, December 31, 2007


22Activity related to the IRS Method Change


(20
)Current year activity related to tax positions taken during
    prior years


6Balance, December 31, 2008 and 2009

$
8               14.
    Commitments
    and Contingencies  Tax
    Contingencies
   131




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Form 10-K Form 10-K) Form 10-K
  Legal
    Contingencies
   132




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Loan
    Recourse
        Mortgage
    Reinsurance
      Year Ended December 31,2009


2008(In millions)Balance, January 1,

$
83


$
32Realized reinsurance
    losses(1)


(10
)


Increase in reinsurance reserves


35



51Balance, December 31,

$
108


$
83  133




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    Realized reinsurance losses include
    $7 million of payments associated with the commutation of
    reinsurance agreements during the year ended December 31,
    2009.  Lease
    Commitments
    FutureMinimumLeasePayments(In millions)2010

$
182011


172012


162013


142014


11Thereafter


74$
150     Purchase
    Commitments
    PurchaseCommitments(In millions)2010

$
962011


12012


2013


2014


Thereafter


$
97   Indemnification
    of Cendant
   134




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Form 8-A Form 8-K Form 8-K) Form 8-K,
    Off-Balance
    Sheet Arrangements and Guarantees
    15.
    Stock-Related
    Matters  Charter
    Amendment
    Reclassification
    of Authorized Unissued Shares
   135




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Rights
    Agreement
    Restrictions
    on Paying Dividends
    16.
    Accumulated
    Other Comprehensive Income (Loss)    UnrealizedCurrency


Gains (Losses)





AccumulatedTranslation


on Available-


Pension


Other ComprehensiveAdjustment


for-Sale Securities


Adjustment


Income (Loss)(In millions)Balance at December 31, 2006

$
15


$
2


$
(4
)

$
13Change during 2007


17



(2
)


1



16Balance at December 31, 2007


32







(3
)


29Change during 2008


(26
)






(6
)


(32
)Balance at December 31, 2008


6







(9
)


(3
)Change during 2009


21







1



22Balance at December 31, 2009

$
27


$



$
(8
)

$
19     17.
    Stock-Based
    Compensation   136




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                 137




---



##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Performance-Based
    Stock Options
  Weighted-AverageWeighted-


Remaining


AggregateAverage


Contractual


IntrinsicNumber


Exercise


Term


Valueof Options


Price


(In years)


(In millions)Outstanding at January 1, 2009


18,409


$
21.16Outstanding at December 31, 2009


18,409


$
21.16



3.5


$
Exercisable at December 31, 2009


18,409


$
21.16



3.5


$
Stock options vested and expected to vest


18,409


$
21.16



3.5


$
   Service-Based
    Stock Options
  Weighted-AverageWeighted-


Remaining


AggregateAverage


Contractual


IntrinsicNumber


Exercise


Term


Valueof Options


Price


(In years)


(In millions)Outstanding at January 1, 2009


2,745,341


$
18.89Granted


565,851



16.50Granted due to
    modification(1)


487,014



18.91Exercised


(302,760
)


18.11Forfeited or expired


(162,044
)


18.76Forfeited or expired due to
    modification(1)


(487,014
)


18.91Outstanding at December 31, 2009


2,846,388


$
18.51



3.6


$
Exercisable at December 31, 2009


2,234,059


$
19.12



2.3


$
Stock options vested and expected to vest


2,831,633


$
18.52



3.6


$
  138




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Total
    Stock Options
  Weighted-AverageWeighted-


Remaining


AggregateAverage


Contractual


IntrinsicNumber


Exercise


Term


Valueof Options


Price


(In years)


(In millions)Outstanding at January 1, 2009


2,763,750


$
18.91Granted


565,851



16.50Granted due to
    modification(1)


487,014



18.91Exercised


(302,760
)


18.11Forfeited or expired


(162,044
)


18.76Forfeited or expired due to
    modification(1)


(487,014
)


18.91Outstanding at December 31, 2009


2,864,797


$
18.53



3.6


$
Exercisable at December 31, 2009


2,252,468


$
19.14



2.3


$
Stock options vested and expected to vest


2,850,042


$
18.54



3.6


$
     (1)
    
    Represents a component of the 2009
    Modified Awards.      Year Ended December 31,2009(1)

2008(2)

2007(3)Expected life (in years)


4.0



6.0



0.5Risk-free interest rate


1.70
%


3.30
%


4.90
%Expected volatility


60.6
%


38.4
%


16.9
%Dividend yield










     (1)
    
    Includes 487,014 stock options
    included in the 2009 Modified Awards for which the fair value at
    the modification date was used to calculate the weighted-average
    grant-date fair value.(2)
    
    Includes 9,207 stock options
    included in the 2008 Modified Awards for which the fair value at
    the modification date was used to calculate the weighted-average
    grant-date fair value.(3)
    
    For the 2007 Modified Stock
    Options, the fair values at the modification dates were used to
    calculate the weighted-average grant-date fair value.   139




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Performance-Based
    RSUs
  Weighted-AverageGrant-Number


Date Fairof
    RSUs(1)


ValueOutstanding at January 1, 2009





$
Granted


364,030



13.79Granted due to
    modification(2)


54,000



19.64Forfeited


(13,833
)


13.79Forfeited or expired due to
    modification(2)


(54,000
)


13.79Outstanding at December 31, 2009


350,197


$
14.69RSUs expected to be converted into shares of Common stock


135,138


$
14.76   Service-Based
    RSUs
  Weighted-AverageGrant-Number


Date Fairof RSUs


ValueOutstanding at January 1, 2009


1,568,934


$
18.83Granted(3)


419,870



14.08Granted due to
    modification(2)


44,466



19.64Converted


(322,625
)


19.63Forfeited


(83,931
)


18.09Forfeited or expired due to
    modification(2)


(44,466
)


18.30Outstanding at December 31, 2009


1,582,248


$
17.49RSUs expected to be converted into shares of Common stock


1,452,142


$
17.58  140




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Total
    RSUs
  Weighted-AverageGrant-Number


Date Fairof
    RSUs(1)


ValueOutstanding at January 1, 2009


1,568,934


$
18.83Granted(3)


783,900



13.95Granted due to
    modification(2)


98,466



19.64Converted


(322,625
)


19.63Forfeited


(97,764
)


17.48Forfeited or expired due to
    modification(2)


(98,466
)


15.83Outstanding at December 31, 2009


1,932,445


$
16.98RSUs expected to be converted into shares of Common stock


1,587,280


$
17.34     (1)
    
    The performance criteria impact the
    number of awards that may vest. The number of RSUs represents
    the maximum number that can be earned, at 1.2 times a 100%
    target level, except for the number expected to be converted
    into shares of the Companys Common stock.(2)
    
    Represents a component of the 2009
    Modified Awards.(3)
    
    These grants include 38,388 RSUs
    earned by the Companys non-employee Directors for services
    rendered as members of the Companys Board of Directors.      Year Ended December 31,2009


2008


2007(In millions)Stock-based compensation expense

$
13


$
11


$
6Income tax benefit related to stock-based compensation expense


(5
)


(4
)


(2
)Stock-based compensation expense, net of income taxes

$
8


$
7


$
4     18.
    Fair
    Value Measurements   141




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Level One.
  Level Two.
  Level Three.
      Mortgage Loans Held for Sale.
 142




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ExcessAggregate UnpaidPrincipalAggregate

BalanceUnpaid

OverCarrying

Principal

CarryingAmount

Balance

Amount(In millions)Mortgage loans held for sale:Total

$
1,218


$
1,257


$
39Loans 90 or more days past due and on non-accrual status


14



26



12     December 31,2009(In millions)First mortgages:Conforming(1)

$
1,106Non-conforming


27Alt-A(2)


2Construction loans


16Total first mortgages


1,151Second lien


24Scratch and
    Dent(3)


41Other


2Total

$
1,218     (1)
    
    Represents mortgage loans that
    conform to the standards of the GSEs.(2)
    
    Represents mortgage loans that are
    made to borrowers with prime credit histories, but do not meet
    the documentation requirements of a conforming loan.(3)
    
    Represents mortgage loans with
    origination flaws or performance issues.  Investment Securities.
  Derivative Instruments.
   143




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Mortgage Servicing Rights.
    December 31, 2009CashLevel

Level

Level

CollateralOne

Two

Three

and
    Netting(1)

Total(In millions)Assets:Mortgage loans held for sale

$



$
1,107


$
111


$



$
1,218Mortgage servicing rights










1,413







1,413Investment securities










12







12Other assets:Derivative assets






86



68



(10
)


144Liabilities:Other liabilities:Derivative liabilities






15



42



(5
)


52   December 31, 2008Level

Level

LevelOne

Two

Three

Netting(1)

Total(In millions)Assets:Mortgage loans held for sale

$



$
829


$
177


$



$
1,006Mortgage servicing rights










1,282







1,282Investment securities










37







37Other assets:Derivative assets






18



71



(2
)


87Other assets


1















1Liabilities:Other liabilities:Derivative liabilities






36



1



(2
)


35     (1)
    
    Adjustments to arrive at the
    carrying amounts of assets and liabilities presented in the
    Consolidated Balance Sheets, which represent the effect of
    netting the payable or receivable with the same counterparties
    under master netting arrangements between the Company and its
    counterparties. 144




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31, 2009Purchases,

TransfersBalance,

Realized

Issuances

Out of

Balance,Beginning

and Unrealized

and

Level

Endof

(Losses)

Settlements,

Three,

ofPeriod

Gains

net

net

Period(In millions)Mortgage loans held for sale

$
177


$
(24
)

$
(27
)

$
(15
)(1)

$
111Mortgage servicing rights


1,282



(280
)(2)


411







1,413Investment securities


37



(21
)


(4
)






12Derivatives, net


70



667



(711
)






26   Year Ended December 31, 2008Purchases,

TransfersBalance,

Realized

Issuances

Into

Balance,Beginning

and Unrealized

and

Level

Endof

(Losses)

Settlements,

Three,

ofPeriod

Gains

net

net

Period(In millions)Mortgage loans held for sale

$
59


$
(9
)

$
(11
)

$
138
(3)

$
177Mortgage servicing rights


1,502



(554
)(2)


334







1,282Investment securities


34



16



(13
)






37Derivatives, net


(9
)


201



(122
)






70     (1)
    
    Represents Scratch and Dent loans
    that were foreclosed upon and construction loans that converted
    to first mortgages, net of transfers into the Scratch and Dent
    population from the conforming or foreclosure populations during
    the year ended December 31, 2009. The Companys
    mortgage loans in foreclosure are measured at fair value on a
    non-recurring basis, as discussed in further detail below.(2)
    
    Represents the reduction in the
    fair value of MSRs due to the realization of expected cash flows
    from the Companys MSRs and the change in fair value of the
    Companys MSRs due to changes in market inputs and
    assumptions used in the MSR valuation model.(3)
    
    Represents Scratch and Dent,
    second-lien and other non-conforming mortgage loans that were
    reclassified from Level Two to Level Three due to the
    lack of observable market data net of construction loans that
    converted to first mortgages during the year ended
    December 31, 2008.   145




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31, 2009MortgageLoans

MortgageHeld for

Servicing

Investment

Derivatives,Sale

Rights

Securities

net(In millions)Gain on mortgage loans, net

$
(31
)

$



$



$
667Change in fair value of mortgage servicing rights






(280
)






Mortgage interest income


7











Other income










(21
)


   Year Ended December 31, 2008MortgageLoans

MortgageHeld for

Servicing

Investment

Derivatives,Sale

Rights

Securities

net(In millions)Gain on mortgage loans, net

$
(15
)

$



$



$
201Change in fair value of mortgage servicing rights






(554
)






Mortgage interest income


6











Other income










16



     Year Ended December 31, 2009Change inFair ValueGain on

of Mortgage

MortgageMortgage

Servicing

Interest

OtherLoans, net

Rights

Income

Income(In millions)Unrealized (loss) gain

$
(11
)

$
111


$
1


$
2   Year Ended December 31, 2008Change inFair ValueGain on

of Mortgage

MortgageMortgage

Servicing

Interest

OtherLoans, net

Rights

Income

Income(In millions)Unrealized gain (loss)

$
54


$
(287
)

$
1


$
16      146




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,2009


2008(In millions)Mortgage loans in foreclosure

$
113


$
113Allowance for probable losses


(20
)


(24
)Mortgage loans in foreclosure, net

$
93


$
89REO

$
51


$
55Adjustment to estimated net realizable value


(15
)


(25
)REO, net

$
36


$
30     19.
    Variable
    Interest Entities    Mortgage
    Venture
   147




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             148




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,2009


2008(In millions)ASSETSCash

$
40


$
9Restricted cash






25Mortgage loans held for sale


60



152Accounts receivable, net


2



3Property, plant and equipment, net


1



1Other assets


6



8Total
    assets(1)

$
109


$
198LIABILITIESAccounts payable and accrued expenses

$
14


$
10Debt






116Other liabilities


2



2Total
    liabilities(2)

$
16


$
128     (1)
    
    See Note 11, Debt and
    Borrowing Arrangements for assets held as collateral
    related to the Mortgage Ventures borrowing arrangements,
    which are not available to pay the Mortgage Ventures
    general obligations.(2)
    
    Total liabilities exclude
    $15 million and $10 million of intercompany payables
    as of December 31, 2009 and 2008, respectively, and
    $11 million outstanding under the Intercompany Line of
    Credit as of December 31, 2008.         149




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      agreed-upon
    Chesapeake
    and D.L. Peterson Trust
     150




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   December 31,2009


2008(In millions)ASSETSCash and cash equivalents

$
3


$
4Restricted
    cash(1)


297



320Accounts receivable


21



22Net investment in fleet leases


3,046



3,690Other assets


22



4Total
    assets(2)

$
3,389


$
4,040LIABILITIESAccounts payable and accrued expenses


3



13Debt(3)


2,859



3,371Total liabilities

$
2,862


$
3,384     (1)
    
    Restricted cash primarily relates
    to amounts specifically designated to purchase assets, to repay
    debt and/or to provide over-collateralization related to the
    Companys vehicle management asset-backed debt arrangements.(2)
    
    See Note 11, Debt and
    Borrowing Arrangements for assets held as collateral
    related to Chesapeakes borrowing arrangements, which are
    not available to pay the Companys general obligations.(3)
    
    See Note 11, Debt and
    Borrowing Arrangements for additional information
    regarding the variable funding and term notes issued by
    Chesapeake.    20.
    Related
    Party Transactions  Spin-Off
    from Cendant
     151




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Certain
    Business Relationships
    21.
    Segment
    Information        Year Ended December 31, 2009Combined

FleetMortgage

Mortgage

Mortgage

ManagementProduction

Servicing

Services

ServicesSegment

Segment

Segments

Segment

Other(1)(2)

Total(In millions)Net revenues

$
880


$
82


$
962


$
1,649


$
(5
)

$
2,606Segment profit
    (loss)(3)


306



(85
)


221



54



(15
)


260Interest income


79



12



91



9



(2
)


98Interest expense


90



61



151



95



(10
)


236Depreciation on operating leases














1,267







1,267Other depreciation and amortization


14



1



15



11







26Total assets


1,464



2,269



3,733



4,331



59



8,123   152




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2008Combined

FleetMortgage

Mortgage

Mortgage

ManagementProduction

Servicing

Services

ServicesSegment

Segment

Segments

Segment

Other(1)(2)

Total(In millions)Net revenues

$
462


$
(276
)

$
186


$
1,827


$
43


$
2,056Segment (loss) profit
    (3)(4)


(90
)


(430
)


(520
)


62



42



(416
)Interest income


92



83



175



16



(2
)


189Interest expense


99



72



171



169



(7
)


333Depreciation on operating leases














1,299







1,299Other depreciation and amortization


13



1



14



11







25Total assets


1,228



2,056



3,284



4,956



33



8,273   Year Ended December 31, 2007Combined

FleetMortgage

Mortgage

Mortgage

ManagementProduction

Servicing

Services

ServicesSegment

Segment

Segments

Segment

Other(1)(2)

Total(In millions)Net revenues

$
205


$
176


$
381


$
1,861


$
(2
)

$
2,240Segment (loss)
    profit(3)


(226
)


75



(151
)


116



(12
)


(47
)Interest income


171



182



353



28



(10
)


371Interest expense


190



85



275



215



(10
)


480Depreciation on operating leases














1,264







1,264Other depreciation and amortization


15



2



17



12







29Total assets


1,840



2,498



4,338



5,023



(4
)


9,357     (1)
    
    Amounts included under the heading
    Other represent intersegment eliminations and amounts not
    allocated to the Companys reportable segments.(2)
    
    Segment loss of $15 million
    reported under the heading Other for the year ended
    December 31, 2009 represents expenses not allocated to the
    Companys reportable segments, approximately
    $3 million of which represents severance for the
    Companys former chief executive officer. Segment profit of
    $42 million and segment loss of $12 million reported
    under the heading Other for the years ended December 31,
    2008 and 2007, respectively, represent income and expenses
    related to a terminated agreement with General Electric Capital
    Corporation. On January 2, 2008, the Company entered into a
    settlement agreement with the respective parties and received a
    reverse termination fee of $50 million, which is included
    in Other income in the Statement of Operations for the year
    ended December 31, 2008, partially offset by
    $4.5 million for the reimbursement of certain fees for
    third-party consulting services.(3)
    
    The following is a reconciliation
    of Income (loss) before income taxes to segment profit (loss):  Year Ended December 31,2009


2008


2007(In millions)Income (loss) before income taxes

$
280


$
(443
)

$
(45
)Less: net income (loss) attributable to noncontrolling interest


20



(27
)


2Segment profit (loss)

$
260


$
(416
)

$
(47
)    (4)
    
    During the year ended
    December 31, 2008, the Company recorded a non-cash Goodwill
    impairment of $61 million related to the PHH Home Loans
    reporting unit, which is included in the Mortgage Production
    segment. Net loss attributable to 153




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  noncontrolling interest for the
    year ended December 31, 2008 was impacted by
    $30 million as a result of the Goodwill impairment. Segment
    loss for the year ended December 31, 2008 was impacted by
    $31 million as a result of the Goodwill impairment.    22.
    Selected
    Quarterly Financial Data  (unaudited)    Quarter EndedMarch 31,

June 30,

September 30,

December 31,2009

2009

2009

2009(In millions, except per share data)Net revenues

$
587


$
768


$
507


$
744Income (loss) before income taxes


5



186



(80
)


169Net income (loss)


5



111



(48
)


105Net income (loss) attributable to PHH Corporation


2



106



(52
)


97Basic earnings (loss) per share attributable to PHH Corporation

$
0.04


$
1.93


$
(0.94
)

$
1.76Diluted earnings (loss) per share attributable to PHH Corporation


0.04



1.91



(0.94
)


1.74   Quarter EndedMarch 31,

June 30,

September 30,

December 31,2008

2008

2008

2008(In millions, except per share data)Net revenues

$
642


$
663


$
533


$
218Income (loss) before income taxes


44



32



(141
)


(378
)Net income (loss)


34



15



(113
)


(217
)Net income (loss) attributable to PHH Corporation


30



16



(84
)


(216
)Basic earnings (loss) per share attributable to PHH Corporation

$
0.55


$
0.31


$
(1.56
)

$
(3.98
)Diluted earnings (loss) per share attributable to PHH Corporation


0.55



0.30



(1.56
)


(3.98
)   23.
    Subsequent
    Events  Class A-1 Series 2010-1 Class A-1 Class A-2 Series 2010-1 Series 2010-1 Class A-2 Series 2010-1 Class A-1 Series 2010-1 Series 2010-1 Series 2010-1 Series 2010-1 Class A-1 Class A-2 Series 2010-1
 154




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATASCHEDULE I  CONDENSED FINANCIAL
    INFORMATION OF REGISTRANT
    PHH CORPORATION
    CONDENSED STATEMENTS OF OPERATIONS
    (In millions)
  Year Ended December 31,2009


2008


2007Revenues:Net revenues from consolidated subsidiaries

$
52


$
61


$
119Other income






50



Net revenues


52



111



119Expenses:Salaries and related expenses


22



12



10Interest expense


79



83



145Interest income










(4
)Other operating expenses


20



23



35Total expenses


121



118



186Loss before income taxes and equity in earnings of
    subsidiaries


(69
)


(7
)


(67
)Benefit from income taxes


(26
)


(3
)


(26
)Loss before equity in earnings of subsidiaries


(43
)


(4
)


(41
)Equity in earnings (loss) of subsidiaries


196



(250
)


29Net income (loss)

$
153


$
(254
)

$
(12
)    155




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATA
    SCHEDULE I  CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT
  PHH
    CORPORATION
    CONDENSED BALANCE SHEETS
    (In millions)
  December 31,2009


2008ASSETSCash and cash equivalents

$
2


$
2Due from consolidated subsidiaries


833



887Investment in consolidated subsidiaries


2,571



2,351Other assets


204



177Total assets

$
3,610


$
3,417LIABILITIES AND EQUITYDebt

$
1,200


$
1,606Due to consolidated subsidiaries


784



498Other liabilities


134



47Total liabilities


2,118



2,151Commitments and contingencies






EQUITYPreferred stock






Common stock


1



1Additional paid-in capital


1,056



1,005Retained earnings


416



263Accumulated other comprehensive income (loss)


19



(3
)Total PHH Corporation stockholders equity


1,492



1,266Total liabilities and equity

$
3,610


$
3,417    156




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATA
    SCHEDULE I  CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT
  PHH
    CORPORATION
    CONDENSED STATEMENTS OF CASH FLOWS
    (In millions)
  Year Ended December 31,2009


2008


2007Net cash provided by (used in) operating activities

$
48


$
2


$
(18
)Cash flows from investing activities:Investment in consolidated subsidiaries






(2
)


(31
)Dividends from consolidated subsidiaries


19



2



23Net cash provided by (used in) investing activities


19







(8
)Cash flows from financing activities:Net cash provided by (used in) consolidated subsidiaries


315



(81
)


601Net decrease in short-term borrowings






(133
)


(304
)Proceeds from borrowings


2,762



3,505



1,512Principal payments on borrowings


(3,118
)


(3,262
)


(1,794
)Proceeds from the sale of Sold Warrants (See Note 1)


35



24



Cash paid for Purchased Options


(66
)


(51
)


Cash paid for debt issuance costs


(1
)


(9
)


(2
)Issuances of Company Common stock


4







6Other, net


2







3Net cash (used in) provided by financing activities


(67
)


(7
)


22Net decrease in Cash and cash equivalents






(5
)


(4
)Cash and cash equivalents at beginning of period


2



7



11Cash and cash equivalents at end of period

$
2


$
2


$
7    157




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATA
    SCHEDULE I  CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT
  PHH
    CORPORATION
    NOTES TO CONDENSED FINANCIAL STATEMENTS
  1.
    Debt and
    Borrowing Arrangements    December 31, 2009Maturity/Interest


ExpiryBalance


Capacity(1)


Rate(2)


Date(Dollars in millions)Term
    Notes(3)

$
439


$
439



6.5%-
    7.9%(4
)


4/2010- 4/2018Credit
    Facilities(5)


360



1,225



1.0%(6
)


1/6/2011Convertible
    Notes(7)


401



401



4.0%



4/2012- 9/2014Total Debt

$
1,200


$
2,065   December 31, 2008Maturity/Interest


ExpiryBalance


Capacity(1)


Rate(2)


Date(Dollars in millions)Term
    Notes(3)

$
441


$
441



6.5%-
    7.9%(4
)


4/2010- 4/2018Credit
    Facilities(5)


957



1,223



1.3%(6
)


1/6/2011Convertible
    Notes(7)


208



208



4.0%



4/15/2012Total Debt

$
1,606


$
1,872     (1)
    
    Capacity is dependent upon
    maintaining compliance with, or obtaining waivers of, the terms,
    conditions and covenants of the respective agreements.  (2)
    
    Interest rate as of
    December 31, 2009 and 2008 represents the stated interest
    rates of the Companys term notes outstanding as of that
    date, the variable rate of the credit facilities, the stated
    interest rate of the Convertible Notes (as defined below) and
    the weighted-average interest rate on the Companys
    outstanding unsecured commercial paper.(3)
    
    Represents medium-term notes (the
    MTNs) publicly issued under the indenture, dated as
    of November 6, 2000 (as amended and supplemented, the
    MTN Indenture) by and between PHH and The Bank of
    New York, as successor trustee for Bank One Trust Company,
    N.A. During the year ended December 31, 2008, MTNs with a
    carrying value of $200 million were repaid upon maturity.(4)
    
    The effective rate of interest of
    the Companys outstanding MTNs was 7.2% as of both
    December 31, 2009 and 2008.(5)
    
    Credit facilities primarily
    represents a $1.3 billion Amended and Restated Competitive
    Advance and Revolving Credit Agreement (the Amended Credit
    Facility), dated as of January 6, 2006, among PHH, a
    group of lenders and JPMorgan Chase Bank, N.A., as
    administrative agent.(6)
    
    Represents the interest rate on the
    Amended Credit Facility as of December 31, 2009 and 2008
    excluding per annum utilization and facility fees. See
     Unsecured Debt  Credit
    Facilities below for additional information.(7)
    
    On April 2, 2008, the Company
    completed a private offering of the 4.0% Convertible Notes
    due 2012 (the 2012 Convertible Notes) with an
    aggregate principal amount of $250 million and a maturity
    date of April 15, 2012 to certain qualified institutional
    buyers. The effective rate of interest of the 2012 Convertible
    Notes was 12.4% as of December 31, 2009. On
    September 29, 2009, the Company completed a private
    offering of the 4.0% Convertible Senior Notes due 2014 (the
    2014 Convertible Notes) with an aggregate principal
    balance of $250 million and a maturity date of
    September 1, 2014 to certain qualified institutional
    buyers. The effective rate of interest of the 2014 Convertible
    Notes was 13.0% as of December 31, 2009. 158




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATA
    SCHEDULE I  CONDENSED CONSOLIDATED FINANCIAL
    INFORMATION OF REGISTRANT
  PHH
    CORPORATION
    NOTES TO CONDENSED FINANCIAL STATEMENTS 
    (Continued)
   Unsecured
    Debt
  Credit
    Facilities
    Convertible
    Notes
       159




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATA
    SCHEDULE I  CONDENSED CONSOLIDATED FINANCIAL
    INFORMATION OF REGISTRANT
  PHH
    CORPORATION
    NOTES TO CONDENSED FINANCIAL STATEMENTS 
    (Continued)
    st th
    Debt
    Maturities
    UnsecuredDebt(In millions)Within one year

$
5Between one and two years


360Between two and three years


250Between three and four years


420Between four and five years


250Thereafter


8$
1,293  160




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATA
    SCHEDULE I  CONDENSED CONSOLIDATED FINANCIAL
    INFORMATION OF REGISTRANT
  PHH
    CORPORATION
    NOTES TO CONDENSED FINANCIAL STATEMENTS 
    (Continued)
    Utilized


AvailableCapacity(1)


Capacity


Capacity(In millions)Unsecured committed credit
    facilities(2)

$
1,225


$
374


$
851     (1)
    
    Capacity is dependent upon
    maintaining compliance with, or obtaining waivers of, the terms,
    conditions and covenants of the respective agreements.  (2)
    
    Utilized capacity includes
    $14 million of letters of credit issued under the Amended
    Credit Facility. This excludes capacity of the Amended Credit
    Facilitys Canadian
    sub-facility.  Debt
    Covenants
      2.
    Guarantees
    and Indemnifications   161




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##### Table of Contents



PHH
    CORPORATION AND SUBSIDIARIES
    SUPPLEMENTARY FINANCIAL DATASCHEDULE II  VALUATION AND
    QUALIFYING ACCOUNTS
  PHH
    CORPORATION AND SUBSIDIARIES
    (In millions)
  AdditionsBalance at


Charged to


Charged





Balance atBeginning


Costs and


to Other





End ofDescription

of Period


Expenses


Accounts


Deductions


PeriodYear Ended December 31, 2009:Deferred tax asset valuation allowance

$
74


$
2


$



$
(6
)

$
70Year Ended December 31, 2008:Deferred tax asset valuation allowance


69



5











74Year Ended December 31, 2007:Deferred tax asset valuation allowance


63



(20
)


26
(1)






69     (1)
    
    As a result of the implementation
    of updates to Accounting Standards Codification 740 Income
    Taxes, the Company recorded a $26 million increase to
    its deferred income tax assets and a $26 million increase
    to its valuation allowance against those deferred income tax
    assets.  PHH
    CORPORATION
    (In millions)
  AdditionsBalance at


Charged to


Charged





Balance atBeginning


Costs and


to Other





End ofDescription

of Period


Expenses


Accounts


Deductions


PeriodYear Ended December 31, 2009:Deferred tax asset valuation allowance

$
6


$
2


$



$



$
8Year Ended December 31, 2008:Deferred tax asset valuation allowance


6















6Year Ended December 31, 2007:Deferred tax asset valuation allowance


6















6  162




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Form 10-K Form 10-K), Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Form 10-K.
  Changes
    in Internal Control Over Financial Reporting
     163




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Board of Directors and Stockholders of PHH
    Corporation:
  Internal Control  Integrated Framework
        Internal Control  Integrated Framework
         164




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##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Executive
    Officers
    Name

Age

Position(s)Jerome J. Selitto


68



President and Chief Executive OfficerSandra E. Bell


52



Executive Vice President and Chief Financial OfficerMark R. Danahy


50



Executive Vice President, MortgageGeorge J. Kilroy


62



Executive Vice President, FleetAdele T. Barbato


61



Senior Vice President and Chief Human Resources OfficerJeff S. Bell


39



Senior Vice President and Chief Information OfficerWilliam F. Brown


52



Senior Vice President, General Counsel and SecretaryMark E. Johnson


50



Senior Vice President and TreasurerJonathan T. McGrain


46



Senior Vice President, Corporate CommunicationsMilton S. Prime


47



Senior Vice PresidentMichael D. Orner


42



Vice President and Controller   Jerome J. Selitto
  Sandra E. Bell
  Mark R. Danahy
 165




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##### Table of Contents



George J. Kilroy
  Adele T. Barbato
  Jeff S. Bell
  William F. Brown
  Mark E. Johnson
  Jonathan T. McGrain
 166




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##### Table of Contents



Milton S. Prime
  Michael D. Orner
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a)(1).
    Financial Statements
  Form 10-K.
  (a)(2).
    Financial Statement Schedules
  Form 10-K Form 10-K.
  (a)(3)
    and (b). Exhibits
  Form 10-K.
 167




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##### Table of Contents



SIGNATURES  Form 10-K
    By:
    /s/  JEROME
    J. SELITTO   Title:
    President and Chief Executive Officer  Form 10-K
  Signature

Title

Date/s/  JEROME
    J. SELITTOJerome
    J. Selitto

President, Chief Executive Officer and Director
    (Principal Executive Officer)

March 1, 2010/s/  SANDRA
    E. BELLSandra
    E. Bell

Executive Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 1, 2010/s/  JAMES
    O. EGANJames
    O. Egan

Non-Executive Chairman of the Board of Directors

March 1, 2010/s/  JAMES
    W. BRINKLEYJames
    W. Brinkley

Director

March 1, 2010/s/  GEORGE
    J. KILROYGeorge
    J. Kilroy

Director

March 1, 2010/s/  ANN
    D. LOGANAnn
    D. Logan

Director

March 1, 2010/s/  CARROLL
    R. WETZEL, JR.Carroll
    R. Wetzel, Jr.

Director

March 1, 2010/s/  ALLAN
    Z. LORENAllan
    Z. Loren

Director

March 1, 2010/s/  GREGORY
    J. PARSEGHIANGregory
    J. Parseghian

Director

March 1, 2010  168




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##### Table of Contents



EXHIBIT INDEX ExhibitNo.

Description

Incorporation by Reference2
.1*

Agreement and Plan of Merger dated as of March 15, 2007 by and
    among General Electric Capital Corporation, a Delaware
    corporation, Jade Merger Sub, Inc., a Maryland corporation, and
    PHH Corporation, a Maryland corporation.

Incorporated by reference to Exhibit 2.1 to our Current Report
    on Form 8-K filed on March 15, 2007.3
.1

Amended and Restated Articles of Incorporation.

Incorporated by reference to Exhibit 3.1 to our Current Report
    on Form 8-K filed on February 1, 2005.3
.2

Articles Supplementary.

Incorporated by reference to Exhibit 3.1 to our Current Report
    on Form 8-K filed on March 27, 2008.3
.3

Articles of Amendment to the Charter of PHH Corporation
    effective as of June 12, 2009.

Incorporated by reference to Exhibit 3.1 to our Current Report
    on Form 8-K filed on June 16, 2009.3
.4

Amended and Restated By-Laws.

Incorporated by reference to Exhibit 3.1 to our Current Report
    on Form 8-K filed on April 2, 2009.4
.1

Specimen common stock certificate.

Incorporated by reference to Exhibit 4.1 to our Annual Report on
    Form 10-K for the year ended December 31, 2004 filed on March
    15, 2005.4
.2

See Exhibits 3.1, 3.2, 3.3 and 3.4 for provisions of the Amended
    and Restated Articles of Incorporation, as amended, and Amended
    and Restated By-laws of the registrant defining the rights of
    holders of common stock of the registrant.

Incorporated by reference to Exhibit 3.1 to our Current Reports
    on Form 8-K filed on February 1, 2005, March 27, 2008, June 16,
    2009 and April 2, 2009, respectively.4
.3

Rights Agreement, dated as of January 28, 2005, by and between
    PHH Corporation and The Bank of New York Mellon (formerly known
    as The Bank of New York).

Incorporated by reference to Exhibit 4.1 to our Current Report
    on Form 8-K filed on February 1, 2005.4
.4

Indenture dated as of November 6, 2000 between PHH Corporation
    and The Bank of New York Mellon (formerly known as The Bank of
    New York, as successor in interest to Bank One Trust Company,
    N.A.), as Trustee.

Incorporated by reference to Exhibit 4.3 to our Annual Report on
    Form 10-K for the year ended December 31, 2005 filed on November
    22, 2006.4
.4.1

Supplemental Indenture No. 1 dated as of November 6, 2000
    between PHH Corporation and The Bank of New York Mellon
    (formerly known as The Bank of New York, as successor in
    interest to Bank One Trust Company, N.A.), as Trustee.

Incorporated by reference to Exhibit 4.4 to our Annual Report on
    Form 10-K for the year ended December 31, 2005 filed on November
    22, 2006.4
.4.2

Supplemental Indenture No. 2 dated as of January 30, 2001
    between PHH Corporation and The Bank of New York Mellon
    (formerly known as The Bank of New York, as successor in
    interest to Bank One Trust Company, N.A.), as Trustee.

Incorporated by reference to Exhibit 4.1 to our Current Report
    on Form 8-K filed on February 8, 2001.4
.4.3

Supplemental Indenture No. 3 dated as of May 30, 2002 between
    PHH Corporation and The Bank of New York Mellon (formerly known
    as The Bank of New York, as successor in interest to Bank One
    Trust Company, N.A.), as Trustee.

Incorporated by reference to Exhibit 4.5 to our Quarterly Report
    on Form 10-Q for the quarterly period ended June 30, 2007 filed
    on August 8, 2007. 169




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference4
.4.4

Supplemental Indenture No. 4 dated as of August 31, 2006 between
    PHH Corporation and The Bank of New York Mellon (formerly known
    as The Bank of New York, as successor in interest to Bank One
    Trust Company, N.A.), as Trustee.

Incorporated by reference to Exhibit 10.1 to our Current Report
    on Form 8-K filed on September 1, 2006.4
.4.5

Form of PHH Corporation Internotes.

Incorporated by reference to Exhibit 4.6 to our Quarterly Report
    on Form 10-Q for the quarterly period ended March 31, 2008 filed
    on May 9, 2008.4
.4.6

Form of 7.125% Note due 2013.

Incorporated by reference to Exhibit 4.5 to our Current Report
    on Form 8-K filed on February 24, 2003.4
.5

Amended and Restated Base Indenture dated as of December 17,
    2008 among Chesapeake Finance Holdings LLC, as Issuer, and JP
    Morgan Chase Bank, N.A., as Indenture Trustee.

Incorporated by reference to Exhibit 10.76 to our Annual Report
    on Form 10-K for the year ended December 31, 2008 filed on March
    2, 2009.4
.5.1

Series 2006-1 Indenture Supplement, dated as of March 7, 2006,
    among Chesapeake Funding LLC (now known as Chesapeake Finance
    Holdings LLC), as Issuer, PHH Vehicle Management Services, LLC,
    as Administrator, JPMorgan Chase Bank, N.A., as Administrative
    Agent, Certain CP Conduit Purchasers, Certain APA Banks, Certain
    Funding Agents, and JPMorgan Chase Bank, N.A., as Indenture
    Trustee.

Incorporated by reference to Exhibit 10.2 to our Current Report
    on Form 8-K filed on March 13, 2006.4
.5.2

Series 2006-2
    Indenture Supplement, dated as of March 7, 2006, among
    Chesapeake Funding LLC (now known as Chesapeake Finance Holdings
    LLC), as Issuer, PHH Vehicle Management Services, LLC, as
    Administrator, JPMorgan Chase Bank, N.A., as Administrative
    Agent, Certain CP Conduit Purchasers, Certain APA Banks, Certain
    Funding Agents, and JPMorgan Chase Bank, N.A., as Indenture
    Trustee.

Incorporated by reference to Exhibit 10.3 to our Current Report
    on Form 8-K filed on March 13, 2006.4
.5.3

Amended and Restated
    Series 2006-2
    Indenture Supplement, dated as of December 1, 2006, among
    Chesapeake Funding LLC, as Issuer, PHH Vehicle Management
    Services, LLC, as Administrator, JPMorgan Chase Bank, N.A., as
    Administrative Agent, Certain CP Conduit Purchasers, Certain APA
    Banks, Certain Funding Agents as set forth therein, and The Bank
    of New York as successor to JPMorgan Chase Bank, N.A., as
    indenture trustee.

Incorporated by reference to Exhibit 10.1 to our Current Report
    on Form 8-K filed on December 7, 2006.4
.5.4

First Amendment, dated as of March 6, 2007, to the
    Series 2006-1
    Indenture Supplement, dated as of March 7, 2006, among
    Chesapeake Funding LLC, as Issuer, PHH Vehicle Management
    Services, LLC, as Administrator, JPMorgan Chase Bank, N.A., as
    Administrative Agent, Certain CP Conduit Purchasers, Certain
    Banks, Certain Funding Agents as set forth therein, and The Bank
    of New York as Successor to JPMorgan Chase Bank, N.A., as
    Indenture Trustee.

Incorporated by reference to Exhibit 10.1 to our Current Report
    on Form 8-K filed on March 8, 2007. 170




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference4
.5.5

First Amendment, dated as of March 6, 2007, to the Amended
    and Restated
    Series 2006-2
    Indenture Supplement, dated as of December 1, 2006, among
    Chesapeake Funding LLC, as Issuer, PHH Vehicle Management
    Services, LLC, as Administrator, JPMorgan Chase Bank, N.A., as
    Administrative Agent, Certain CP Conduit Purchasers, Certain
    Banks, Certain Funding Agents as set forth therein, and The Bank
    of New York as Successor to JPMorgan Chase Bank, N.A., as
    Indenture Trustee.

Incorporated by reference to Exhibit 10.2 to our Current Report
    on Form 8-K filed on March 8, 2007.4
.5.6

Second Amendment, dated as of November 30, 2007, to the
    Amended and Restated
    Series 2006-2
    Indenture Supplement, dated as of December 1, 2006, as
    amended as of March 6, 2007, among Chesapeake, as issuer,
    PHH Vehicle Management Services, LLC, as administrator, The Bank
    of New York Mellon (formerly known as The Bank of New York), as
    successor to JP Morgan Chase Bank, N. A., as indenture trustee,
    certain commercial paper conduit purchasers, certain banks and
    certain funding agents as set forth therein, and JPMorgan Chase
    Bank, N. A., in its capacity as administrative agent for the CP
    Conduit Purchasers, the APA Banks and the Funding Agents.

Incorporated by reference to Exhibit 10.1 to our Current Report
    on Form 8-K filed on December 6, 2007.4
.5.7

Second Amendment, dated as of February 28, 2008, to the
    Series 2006-1
    Indenture Supplement, dated as of March 7, 2006, as amended
    as of March 6, 2007, among Chesapeake Funding LLC, as
    Issuer, PHH Vehicle Management Services, LLC, as Administrator,
    JPMorgan Chase Bank, N.A., as Administrative Agent, Certain CP
    Conduit Purchasers, Certain Banks, Certain Funding Agents as set
    forth therein, and The Bank of New York as Successor to JPMorgan
    Chase Bank, N.A., as Indenture Trustee.

Incorporated by reference to Exhibit 10.1 to our Current Report
    on Form 8-K filed on March 4, 2008.4
.5.8

Third Amendment, dated as of December 17, 2008, to the
    Series 2006-1
    Indenture Supplement, dated as of March 7, 2006, as amended
    as of March 6, 2007 and as of February 28, 2008, among
    Chesapeake, as issuer, PHH Vehicle Management Services, LLC, as
    administrator, The Bank of New York Mellon (formerly known as
    The Bank of New York), as successor to JPMorgan Chase Bank, N.
    A., as indenture trustee, certain commercial paper conduit
    purchasers, certain banks and certain funding agents as set
    forth therein, and JPMorgan Chase Bank, N. A., in its capacity
    as administrative agent for the CP Conduit Purchasers, the APA
    Banks and the Funding Agents.

Incorporated by reference to Exhibit 10.74 to our Annual Report
    on Form 10-K for the year ended December 31, 2008 filed on March
    2, 2009. 171




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference4
.5.9

Third Amendment, dated as of December 17, 2008, to the Amended
    and Restated Series 2006-2 Indenture Supplement, dated as of
    December 1, 2006, as amended as of March 6, 2007 and as of
    November 30, 2007, among Chesapeake, as issuer, PHH Vehicle
    Management Services, LLC, as administrator, The Bank of New York
    Mellon (formerly known as The Bank of New York), as successor to
    JP Morgan Chase Bank, N. A., as indenture trustee, certain
    commercial paper conduit purchasers, certain banks and certain
    funding agents as set forth therein, and JPMorgan Chase Bank, N.
    A., in its capacity as administrative agent for the CP Conduit
    Purchasers, the APA Banks and the Funding Agents.

Incorporated by reference to Exhibit 10.75 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2008 filed on March 2,
    2009.4
.5.10

Fourth Amendment, dated as of February 26, 2009, to the Series
    2006-1 Indenture Supplement, dated as of March 7, 2006, as
    amended as of March 6, 2007, February 28, 2008 and December 17,
    2008, among Chesapeake, as issuer, PHH Vehicle Management
    Services, LLC, as administrator, The Bank of New York Mellon
    (formerly known as The Bank of New York) as successor to JP
    Morgan Chase Bank N.A., as indenture trustee, certain commercial
    paper conduit purchasers, certain banks and certain funding
    agents as set forth therein, and JP Morgan Chase Bank, N.A., in
    its capacity as administrative agent for the CP Conduit
    Purchasers, the APA Banks and the Funding Agents.

Incorporated by reference to Exhibit 10.78 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2008 filed on March 2,
    2009.4
.5.11

Series 2009-1 Indenture Supplement, dated as of June 9, 2009,
    among Chesapeake Funding LLC, as issuer, and The Bank of New
    York Mellon, as indenture trustee.

Incorporated by reference to Exhibit 4.5.11 to our
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2009 filed on
    November 5, 2009.4
.5.12

Series 2009-2 Indenture Supplement, dated as of September 11,
    2009, among Chesapeake Funding LLC, as issuer, and The Bank of
    New York Mellon, as indenture trustee.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on September 16, 2009.4
.6

Indenture dated as of April 2, 2008, by and between PHH
    Corporation and The Bank of New York, as Trustee.

Incorporated by reference to Exhibit 4.1 to our Current
    Report on
    Form 8-K
    filed on April 4, 2008.4
.6.1

Form of Global Note 4.00% Convertible Senior Note Due 2012
    (included as part of Exhibit 4.6).

Incorporated by reference to Exhibit 4.2 to our Current
    Report on
    Form 8-K
    filed on April 4, 2008.4
.7

Indenture dated as of September 29, 2009, by and between PHH
    Corporation and The Bank of New York Mellon, as Trustee.

Incorporated by reference to Exhibit 4.1 to our Current
    Report on
    Form 8-K
    filed on October 1, 2009.4
.7.1

Form of Global Note 4.00% Convertible Senior Note Due 2014
    (included as part of Exhibit 4.7).

Incorporated by reference to Exhibit A of Exhibit 4.1
    to our Current Report on
    Form 8-K
    filed on October 1, 2009. 172




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference4
.8

Trust Indenture dated as of November 16, 2009, between BNY Trust
    Company of Canada as issuer trustee of Fleet Leasing Receivables
    Trust and ComputerShare Trust Company Of Canada, as indenture
    trustee.

Filed herewith.4
.8.1

Series 2010-1 Supplemental Indenture dated as of January 27,
    2010, between BNY Trust Company of Canada as issuer trustee of
    Fleet Leasing Receivables Trust and ComputerShare Trust Company
    Of Canada, as indenture trustee.

Filed herewith.4
.8.2

Fleet Leasing Receivables Trust Series 2010-1 Class A-1a
    Asset-Backed Note (included as part of Exhibit 4.8.1).

Incorporated by reference to Exhibit 4.8.1 filed herewith.4
.8.3

Fleet Leasing Receivables Trust Series 2010-1 Class A-1b
    Asset-Backed Note (included as part of Exhibit 4.8.1).

Incorporated by reference to Exhibit 4.8.1 filed herewith.4
.8.4

Fleet Leasing Receivables Trust Series 2010-1 Class A-2a
    Asset-Backed Note (included as part of Exhibit 4.8.1).

Incorporated by reference to Exhibit 4.8.1 filed herewith.4
.8.5

Fleet Leasing Receivables Trust Series 2010-1 Class A-2b
    Asset-Backed Note (included as part of Exhibit 4.8.1).

Incorporated by reference to Exhibit 4.8.1 filed herewith.4
.8.6

Fleet Leasing Receivables Trust Series 2010-1 Class B
    Asset-Backed Note (included as part of Exhibit 4.8.1)(a)

Incorporated by reference to Exhibit 4.8.1 filed herewith.10
.1

Amended and Restated Competitive Advance and Revolving Credit
    Agreement, dated as of January 6, 2006, by and among PHH
    Corporation and PHH Vehicle Management Services, Inc., as
    Borrowers, J.P. Morgan Securities, Inc. and Citigroup
    Global Markets, Inc., as Joint Lead Arrangers, the Lenders
    referred to therein (the Lenders), and JPMorgan
    Chase Bank, N.A., as a Lender and Administrative Agent for the
    Lenders.

Incorporated by reference to Exhibit 10.47 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    November 22, 2006.10
.1.1

Second Amendment, dated as of November 2, 2007, to the Amended
    and Restated Competitive Advance and Revolving Credit Agreement,
    as amended, dated as of January 6, 2006, by and among PHH
    Corporation and PHH Vehicle Management Services, Inc., as
    Borrowers, J.P. Morgan Securities, Inc. and Citigroup
    Global Markets, Inc., as Joint Lead Arrangers, the Lenders
    referred to therein, and JPMorgan Chase Bank, N.A., as a Lender
    and Administrative Agent for the Lenders.

Incorporated by reference to Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed on November 2, 2007. 173




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference10
.1.2

Third Amendment, dated as of March 27, 2008, to the Amended and
    Restated Competitive Advance and Revolving Credit Agreement, as
    amended, dated as of January 6, 2006, by and among PHH
    Corporation and PHH Vehicle Management Services, Inc., as
    Borrowers, J.P. Morgan Securities, Inc. and Citigroup
    Global Markets, Inc., as Joint Lead Arrangers, the Lenders
    referred to therein, and JPMorgan Chase Bank, N.A., as a Lender
    and Administrative Agent for the Lenders.

Incorporated by reference to Exhibit 10.1.2 to our
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2009 filed on
    November 5, 2009.10
.2

Separation Agreement, dated as of January 31, 2005, by and
    between Cendant Corporation and PHH Corporation.

Incorporated by reference to Exhibit 10.5 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.3

Amended and Restated Tax Sharing Agreement dated as of December
    21, 2005 between PHH Corporation and Cendant Corporation.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on December 28, 2005.10
.4

Amended and Restated Limited Liability Company Operating
    Agreement, dated as of January 31, 2005, of PHH Home Loans, LLC,
    by and between PHH Broker Partner Corporation and Cendant Real
    Estate Services Venture Partner, Inc.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.4.1

Amendment No. 1 to the Amended and Restated Limited Liability
    Company Operating Agreement of PHH Home Loans, LLC, dated May
    12, 2005, by and between PHH Broker Partner Corporation and
    Cendant Real Estate Services Venture Partner, Inc.

Incorporated by reference to Exhibit 3.3.1 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended September 30, 2005 filed on
    November 14, 2005.10
.4.2

Amendment No. 2, dated as of March 31, 2006 to the Amended and
    Restated Limited Liability Company Operating Agreement of PHH
    Home Loans, LLC, dated as of January 31, 2005, as amended.

Incorporated by reference to Exhibit 10.1 to the Current
    Report on
    Form 8-K
    of Cendant Corporation (now known as Avis Budget Group, Inc.)
    filed on April 4, 2006.10
.4.3

Strategic Relationship Agreement, dated as of January 31, 2005,
    by and among Cendant Real Estate Services Group, LLC, Cendant
    Real Estate Services Venture Partner, Inc., PHH Corporation,
    Cendant Mortgage Corporation, PHH Broker Partner Corporation and
    PHH Home Loans, LLC.

Incorporated by reference to Exhibit 10.2 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.4.4

Trademark License Agreement, dated as of January 31, 2005, by
    and among TM Acquisition Corp., Coldwell Banker Real Estate
    Corporation, ERA Franchise Systems, Inc. and Cendant Mortgage
    Corporation.

Incorporated by reference to Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.4.5

Marketing Agreement, dated as of January 31, 2005, by and
    between Coldwell Banker Real Estate Corporation, Century 21 Real
    Estate LLC, ERA Franchise Systems, Inc., Sothebys
    International Affiliates, Inc. and Cendant Mortgage Corporation.

Incorporated by reference to Exhibit 10.4 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.4.6

Management Services Agreement, dated as of March 31, 2006,
    between PHH Home Loans, LLC and PHH Mortgage Corporation.

Incorporated by reference to Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed on April 6, 2006. 174




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference10
.4.7

Trademark License Agreement, dated as of January 31, 2005, by
    and between Cendant Real Estate Services Venture Partner, Inc.,
    and PHH Home Loans, LLC.

Incorporated by reference to Exhibit 10.66 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    November 22, 2006.10
.5

Origination Assistance Agreement, dated as of December 15, 2000,
    as amended through March 24, 2006, by and between Merrill Lynch
    Credit Corporation and Cendant Mortgage Corporation (renamed PHH
    Mortgage Corporation).

Incorporated by reference to Exhibit 10.67 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    November 22, 2006.10
.5.1

Portfolio Servicing Agreement, dated as of January 28, 2000, as
    amended through October 27, 2004, by and between Merrill Lynch
    Credit Corporation and Cendant Mortgage Corporation (renamed PHH
    Mortgage Corporation).

Incorporated by reference to Exhibit 10.68 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    November 22, 2006.10
.5.2

Loan Purchase and Sale Agreement, dated as of December 15, 2000,
    as amended through March 24, 2006, by and between Merrill Lynch
    Credit Corporation and Cendant Mortgage Corporation (renamed PHH
    Mortgage Corporation).

Incorporated by reference to Exhibit 10.69 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    November 22, 2006.10
.5.3

Equity
Access®

and
Omegasm

Loan Subservicing Agreement, dated as of June 6, 2002, as
amended through March 14, 2006, by and between Merrill Lynch
Credit Corporation, as servicer, and Cendant Mortgage
Corporation (renamed PHH Mortgage Corporation), as subservicer.

Incorporated by reference to Exhibit 10.70 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    November 22, 2006.10
.5.4

Servicing Rights Purchase and Sale Agreement, dated as of
    January 28, 2000, as amended through March 29, 2005, by and
    between Merrill Lynch Credit Corporation and Cendant Mortgage
    Corporation (renamed PHH Mortgage Corporation).

Incorporated by reference to Exhibit 10.71 to our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    November 22, 2006.10
.5.5

Letter Agreement dated August 8, 2008 by and between PHH
    Mortgage Corporation and Merrill Lynch Credit Corporation
    relating to the Servicing Rights Purchase and Sale Agreement
    dated January 28, 2000, as amended.

Incorporated by reference to Exhibit 10.69 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended September 30, 2008 filed on
    November 10, 2008.10
.5.6

Mortgage Loan Subservicing Agreement by and between Merrill
    Lynch Credit Corporation and PHH Mortgage Corporation dated as
    of August 8, 2008.

Incorporated by reference to Exhibit 10.70 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended September 30, 2008 filed on
    November 10, 2008.10
.6

Master Exchange Agreement, dated as of March 7, 2006, by and
    among PHH Funding, LLC, Chesapeake Finance Holdings LLC (f/k/a
    Chesapeake Funding LLC) and D.L. Peterson Trust.

Incorporated by reference to Exhibit 10.4 to our Current
    Report on
    Form 8-K
    filed on March 13, 2006.10
.7

Settlement Agreement, dated as of January 4, 2008, by, between
    and among PHH Corporation, Pearl Mortgage Acquisition 2 L.L.C.
    and Blackstone Capital Partners V L.P.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on January 7, 2008.10
.8

Master Repurchase Agreement, dated as of February 28, 2008,
    among PHH Mortgage Corporation, as Seller, and Citigroup Global
    Markets Realty Corp., as Buyer.

Incorporated by reference to Exhibit 10.2 to our Current
    Report on
    Form 8-K
    filed on March 4, 2008. 175




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference10
.8.1

Guaranty, dated as of February 28, 2008, by PHH Corporation in
    favor of Citigroup Global Markets Realty, Corp., party to the
    Master Repurchase Agreement, dated as of February 28, 2008,
    among PHH Mortgage Corporation, as Seller, and Citigroup Global
    Markets Realty Corp., as Buyer.

Incorporated by reference to Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed on March 4, 2008.10
.9

Purchase Agreement dated March 27, 2008 by and between PHH
    Corporation, Citigroup Global Markets Inc., J.P. Morgan
    Securities Inc. and Wachovia Capital Markets, LLC, as
    representatives of the Initial Purchasers.

Incorporated by reference to Exhibit 10.1 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.1

Master Terms and Conditions for Convertible Bond Hedging
    Transactions dated March 27, 2008 by and between PHH Corporation
    and J.P. Morgan Chase Bank, N.A.

Incorporated by reference to Exhibit 10.2 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.2

Master Terms and Conditions for Warrants dated March 27, 2008 by
    and between PHH Corporation and J.P. Morgan Chase Bank, N.A.

Incorporated by reference to Exhibit 10.3 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.3

Confirmation of Convertible Bond Hedging Transactions dated
    March 27, 2008 by and between PHH Corporation and
    J.P. Morgan Chase Bank, N.A.

Incorporated by reference to Exhibit 10.4 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.4

Confirmation of Warrant dated March 27, 2008 by and between PHH
    Corporation and J.P. Morgan Chase Bank, N.A.

Incorporated by reference to Exhibit 10.5 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.5

Master Terms and Conditions for Convertible Debt Bond Hedging
    Transactions dated March 27, 2008 by and between PHH Corporation
    and Wachovia Bank, N.A.

Incorporated by reference to Exhibit 10.6 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.6

Master Terms and Conditions for Warrants dated March 27, 2008 by
    and between PHH Corporation and Wachovia Bank, N.A.

Incorporated by reference to Exhibit 10.7 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.7

Confirmation of Convertible Bond Hedging Transactions dated
    March 27, 2008 by and between PHH Corporation and Wachovia Bank,
    N.A.

Incorporated by reference to Exhibit 10.8 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.8

Confirmation of Warrant dated March 27, 2008 by and between PHH
    Corporation and Wachovia Bank, N.A.

Incorporated by reference to Exhibit 10.9 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.9

Master Terms and Conditions for Convertible Bond Hedging
    Transactions dated March 27, 2008 by and between PHH Corporation
    and Citibank, N.A.

Incorporated by reference to Exhibit 10.10 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.10

Master Terms and Conditions for Warrants dated March 27, 2008 by
    and between PHH Corporation and Citibank, N.A.

Incorporated by reference to Exhibit 10.11 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.11

Confirmation of Convertible Bond Hedging Transactions dated
    March 27, 2008 by and between PHH Corporation and Citibank, N.A.

Incorporated by reference to Exhibit 10.12 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008.10
.9.12

Confirmation of Warrant dated March 27, 2008 by and between PHH
    Corporation and Citibank, N.A.

Incorporated by reference to Exhibit 10.13 to our Current
    Report of
    Form 8-K
    filed on April 4, 2008. 176




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference10
.10

Amended and Restated Master Repurchase Agreement, dated as of
    June 26, 2008, between PHH Mortgage Corporation, as seller, and
    The Royal Bank of Scotland plc, as buyer and agent.

Incorporated by reference to Exhibit 10.65 to our Quarterly
    Report of
    Form 10-Q
    for the quarterly period ended on September 30, 2008 filed
    on November 10, 2008.10
.10.1

Second Amended and Restated Guaranty, dated as of June 26, 2008,
    by PHH Corporation in favor of The Royal Bank of Scotland plc
    and Greenwich Capital Financial Products, Inc.

Incorporated by reference to Exhibit 10.2 to our Current
    Report on
    Form 8-K
    filed on July 1, 2008.10
.11

Purchase Agreement dated June 2, 2009 by and among PHH
    Corporation, PHH Vehicle Management Services, LLC, Chesapeake
    Funding LLC and J.P. Morgan Securities, Inc, Banc of
    America Securities LLC and Citigroup Global Markets, Inc., as
    representatives of several initial purchasers.

Incorporated by reference to Exhibit 10.11 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended September 30, 2009 filed on
    November 5, 2009.10
.12

Purchase Agreement dated September 2, 2009 by and among PHH
    Corporation, PHH Vehicle Management Services, LLC, Chesapeake
    Funding LLC and J.P. Morgan Securities, Inc, Banc of
    America Securities LLC and Citigroup Global Markets, Inc., as
    representatives of several initial purchasers.

Incorporated by reference to Exhibit 10.12 to our Quarterly
    Report on
    Form 10-Q/A
    for the quarterly period ended September 30, 2009 filed on
    January 12, 2010.10
.13

Purchase Agreement dated September 23, 2009, by and between PHH
    Corporation, Citigroup Global Markets Inc., J.P. Morgan
    Securities Inc. and Wells Fargo Securities, LLC, as
    representatives of the Initial Purchasers

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.1

Master Terms and Conditions for Convertible Bond Hedging
    Transactions dated September 23, 2009, by and between PHH
    Corporation and JPMorgan Chase Bank, National Association,
    London Branch

Incorporated by reference to Exhibit 10.2 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.2

Master Terms and Conditions for Warrants dated September 23,
    2009, by and between PHH Corporation and JPMorgan Chase Bank,
    National Association, London Branch

Incorporated by reference to Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.3

Confirmation of Convertible Bond Hedging Transactions dated
    September 23, 2009, by and between PHH Corporation and JPMorgan
    Chase Bank, National Association, London Branch

Incorporated by reference to Exhibit 10.4 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.4

Confirmation of Warrants dated September 23, 2009, by and
    between PHH Corporation and JPMorgan Chase Bank, National
    Association, London Branch

Incorporated by reference to Exhibit 10.5 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.5

Master Terms and Conditions for Convertible Bond Hedging
    Transactions dated September 23, 2009, by and between PHH
    Corporation and Wachovia Bank, National Association

Incorporated by reference to Exhibit 10.6 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.6

Master Terms and Conditions for Warrants dated September 23,
    2009, by and between PHH Corporation and Wachovia Bank, National
    Association

Incorporated by reference to Exhibit 10.7 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009. 177




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference10
.13.7

Confirmation of Convertible Bond Hedging Transactions dated
    September 23, 2009, by and between PHH Corporation and Wachovia
    Bank, National Association

Incorporated by reference to Exhibit 10.8 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.8

Confirmation of Warrants dated September 23, 2009, by and
    between PHH Corporation and Wachovia Bank, National Association

Incorporated by reference to Exhibit 10.9 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.9

Master Terms and Conditions for Convertible Bond Hedging
    Transactions dated September 23, 2009, by and between PHH
    Corporation and Citibank, N.A.

Incorporated by reference to Exhibit 10.10 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.10

Master Terms and Conditions for Warrants dated September 23,
    2009, by and between PHH Corporation and Citibank, N.A.

Incorporated by reference to Exhibit 10.11 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.11

Confirmation of Convertible Bond Hedging Transactions dated
    September 23, 2009, by and between PHH Corporation and Citibank,
    N.A.

Incorporated by reference to Exhibit 10.12 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.12

Confirmation of Warrants dated September 23, 2009, by and
    between PHH Corporation and Citibank, N.A.

Incorporated by reference to Exhibit 10.13 to our Current
    Report on
    Form 8-K
    filed on September 29, 2009.10
.13.13

Amendment to Convertible Bond Hedging Transaction Confirmation
    dated September 29, 2009, by and between PHH Corporation and
    JPMorgan Chase Bank, National Association, London Branch

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on October 1, 2009.10
.13.14

Confirmation of Additional Warrants dated September 29, 2009, by
    and between PHH Corporation and JPMorgan Chase Bank, National
    Association, London Branch

Incorporated by reference to Exhibit 10.2 to our Current
    Report on
    Form 8-K
    filed on October 1, 2009.10
.13.15

Amendment to Convertible Bond Hedging Transaction Confirmation
    dated September 29, 2009, by and between PHH Corporation and
    Wachovia Bank, National Association

Incorporated by reference to Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed on October 1, 2009.10
.13.16

Confirmation of Additional Warrants dated September 29, 2009, by
    and between PHH Corporation and Wachovia Bank, National
    Association

Incorporated by reference to Exhibit 10.4 to our Current
    Report on
    Form 8-K
    filed on October 1, 2009.10
.13.17

Amendment to Convertible Bond Hedging Transaction Confirmation
    dated September 29, 2009, by and between PHH Corporation and
    Citibank, N.A.

Incorporated by reference to Exhibit 10.5 to our Current
    Report on
    Form 8-K
    filed on October 1, 2009.10
.13.18

Confirmation of Additional Warrants dated September 29, 2009, by
    and between PHH Corporation and Citibank, N.A.

Incorporated by reference to Exhibit 10.6 to our Current
    Report on
    Form 8-K
    filed on October 1, 2009.10
.14

PHH Corporation Non-Employee Directors Deferred Compensation
    Plan.

Incorporated by reference to Exhibit 10.10 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.14.1

PHH Corporation Officer Deferred Compensation Plan.

Incorporated by reference to Exhibit 10.11 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.14.2

PHH Corporation Savings Restoration Plan.

Incorporated by reference to Exhibit 10.12 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005. 178




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference10
.14.3

PHH Corporation 2005 Equity and Incentive Plan.

Incorporated by reference to Exhibit 10.9 to our Current
    Report on
    Form 8-K
    filed on February 1, 2005.10
.14.4

Form of PHH Corporation 2005 Equity and Incentive Plan
    Non-Qualified Stock Option Agreement, as amended.

Incorporated by reference to Exhibit 10.28 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended March 31, 2005 filed on
    May 16, 2005.10
.14.5

Form of PHH Corporation 2005 Equity and Incentive Plan
    Non-Qualified Stock Option Conversion Award Agreement.

Incorporated by reference to Exhibit 10.29 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended March 31, 2005 filed on
    May 16, 2005.10
.14.6

Resolution of the PHH Corporation Board of Directors dated March
    31, 2005, adopting non-employee director compensation
    arrangements.

Incorporated by reference to Exhibit 10.32 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended March 31, 2005 filed on
    May 16, 2005.10
.14.7

Amendment Number One to the PHH Corporation 2005 Equity and
    Incentive Plan.

Incorporated by reference to Exhibit 10.35 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended June 30, 2005 filed on
    August 12, 2005.10
.14.8

Form of PHH Corporation 2005 Equity and Incentive Plan
    Non-Qualified Stock Option Award Agreement, as revised June 28,
    2005.

Incorporated by reference to Exhibit 10.36 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended June 30, 2005 filed on
    August 12, 2005.10
.14.9

Form of PHH Corporation 2005 Equity and Incentive Plan
    Restricted Stock Unit Award Agreement, as revised June 28, 2005.

Incorporated by reference to Exhibit 10.37 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended June 30, 2005 filed on
    August 12, 2005.10
.14.10

Form of PHH Corporation Amended and Restated Severance Agreement
    for Certain Executive Officers as approved by the PHH
    Corporation Compensation Committee on January 10, 2008.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on January 14, 2008.10
.14.11

PHH Corporation Change in Control Severance Agreement by and
    between the Company and Sandra Bell dated as of October 13, 2008.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on October 14, 2008.10
.14.12

Form of 2009 Performance Unit Award Notice and Agreement for
    Certain Executive Officers, as approved by the Compensation
    Committee on March 25, 2009.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on March 31, 2009.10
.14.13

Amended and Restated 2005 Equity and Incentive Plan (as amended
    and restated through June 17, 2009).

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on June 22, 2009.10
.14.14

Transition Services and Separation Agreement by and between PHH
    Corporation and Terence W. Edwards dated August 5, 2009.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on August 5, 2009.10
.14.15

Amendment to the Transition Services and Separation Agreement by
    and between PHH Corporation and Terence W. Edwards dated as of
    September 11, 2009.

Incorporated by reference to Exhibit 10.2 to our Current
    Report on
    Form 8-K
    filed on September 16, 2009.10
.14.16

Release by and between PHH Corporation and Terence W. Edwards
    dated as of September 11, 2009.

Incorporated by reference to Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed on September 16, 2009. 179




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##### Table of Contents



ExhibitNo.

Description

Incorporation by Reference10
.14.17

Employment Agreement dated as of October 26, 2009, between
    Jerome J. Selitto and PHH Corporation.

Incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on October 30, 2009.10
.15

Trust Purchase Agreement dated January 27, 2010 between Fleet
    Leasing Receivables Trust, as purchaser, PHH Fleet Lease
    Receivables L.P., as seller, PHH Vehicle Management Services
    Inc., as servicer and PHH Corporation, as performance guarantor.

Filed herewith.10
.15.1

Agency Agreement dated as of January 25, 2010, between BNY Trust
    Company of Canada as trustee of Fleet Leasing Receivables Trust,
    PHH Vehicle Management Services Inc., as financial services
    agent of Fleet Leasing Receivables Trust and as originator, PHH
    Fleet Lease Receivables L.P., as seller and Merrill Lynch Canada
    Inc., CIBC World Markets Inc., RBC Dominion Securities Inc. and
    Scotia Capital Inc., as agents.

Filed herewith.10
.15.2

Agency Agreement dated as of January 25, 2010, between BNY Trust
    Company of Canada as trustee of Fleet Leasing Receivables Trust,
    PHH Vehicle Management Services Inc., as financial services
    agent of Fleet Leasing Receivables Trust and as originator, PHH
    Fleet Lease Receivables L.P., as seller and Merrill Lynch Canada
    Inc. and Banc of America Securities LLC, as agents.

Filed herewith.12


Computation of Ratio of Earnings to Fixed Charges.

Filed herewith.21


Subsidiaries of Registrant.

Filed herewith.23


Consent of Independent Registered Public Accounting Firm.

Filed herewith.24


Powers of Attorney

Incorporated by reference to the signature page to this Annual
    Report on
    Form 10-K.31
.1

Certification of Chief Executive Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.

Filed herewith.31
.2

Certification of Chief Financial Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.

Filed herewith.32
.1

Certification of Chief Executive Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.

Filed herewith.32
.2

Certification of Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.

Filed herewith.     *
    
    Schedules and exhibits of this
    Exhibit have been omitted pursuant to Item 601(b)(2) of
    Regulation S-K
    which portions will be furnished upon the request of the
    Commission.
    
    Confidential treatment has been
    requested for certain portions of this Exhibit pursuant to
    Rule 24b-2
    of the Exchange Act which portions have been omitted and filed
    separately with the Commission.
    
    Confidential treatment has been
    granted for certain portions of this Exhibit pursuant to an
    order under the Exchange Act which portions have been omitted
    and filed separately with the Commission.
    
    Confidential treatment has been
    granted for certain portions of this Exhibit which was filed as
    Exhibit 10.79 to the registrants Quarterly Report on
    Form 10-Q
    filed with the Commission on August 4, 2009. This Exhibit
    was re-filed with fewer redactions as Exhibit 10.11 to the
    registrants Quarterly Report on
    Form 10-Q
    filed with the Commission on November 5, 2009. The redacted
    portions of this Exhibit have been filed separately with the
    Commission.
    
    Management or compensatory plan or
    arrangement required to be filed pursuant to Item 601(b)(10) of
    Regulation S-K. 180