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                                                                   Exhibit 4.1









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                                 PHH CORPORATION

                                     Issuer

                                       to

                          BANK ONE TRUST COMPANY, N.A.

                                     Trustee

                                   ----------

                          Supplemental Indenture No. 3

                            Dated as of May 30, 2002

                                    ---------

                             SENIOR DEBT SECURITIES








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                         SUPPLEMENTAL INDENTURE NO. 3

      SUPPLEMENTAL INDENTURE NO. 3, dated as of May 30, 2002, between PHH
Corporation, a corporation duly organized and existing under the laws of the
State of Maryland (the "COMPANY"), and Bank One Trust Company, N.A., a national
banking association duly organized and existing under the laws of the United
States of America (the "TRUSTEE"), as trustee under the Senior Debt Securities
Indenture hereinafter mentioned.

                                   WITNESSETH:

      WHEREAS, the Company duly authorized the execution and delivery of a
Senior Debt Securities Indenture, dated as of November 6, 2000 (the "SENIOR
INDENTURE"), providing for the issuance from time to time of Securities of the
Company, unlimited as to principal amount, to bear such rates of interest, to
mature at such time or times, to be issued in one or more series; and

      WHEREAS, Section 901 of the Senior Indenture permits the Company and the
Trustee to enter into one or more indentures supplemental to the Senior
Indenture to, among other things, add any additional covenants of the Company
for the holders of a particular series of Securities and to change or eliminate
any provision of the Senior Indenture so long as such change or elimination
shall not become effective with respect to any particular series entitled to the
benefit of such provision until such time as no Securities of such series are
outstanding;

      WHEREAS, the Company desires to supplement or amend the Senior Indenture
only with respect to the Securities issued on and after the date hereof;

      WHEREAS, the supplements or amendments to the Senior Indenture set forth
herein shall have no effect upon any series of Securities Outstanding on the
date hereof; and

      WHEREAS, all conditions necessary to authorize the execution and delivery
of this Supplemental Indenture No. 3 and to make this Supplemental Indenture No.
3 valid and binding have been complied with or have been done or performed.

      NOW, THEREFORE, in consideration of the premises set forth above, the
Company hereby requests that the Trustee join with it in this Supplemental
Indenture No. 3 to add to the covenants of the Company in the Senior Indenture
as follows:

                                  ARTICLE One

                                   DEFINITIONS

      Section 1.01 For all purposes of the Senior Indenture and this
Supplemental Indenture No. 3, except as otherwise expressly provided or unless
the context otherwise requires:

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      a.    unless indicated otherwise, "herein," "hereof" and other words of
            similar import refer to this Supplemental Indenture No. 3 as a whole
            and not to any particular Article, Section or other subdivision; and

      b.    all capitalized terms used in this Supplemental Indenture No. 3 but
            not defined herein shall have the meanings assigned such terms in
            the Senior Indenture.

                                  ARTICLE Two

                   REDEMPTION OF SECURITIES; SURVIVOR'S OPTION

      Section 2.01 SURVIVOR'S OPTION. If so specified in any Security, the
representative of a beneficial owner of such Security shall have the option to
elect repayment or repurchase of such Security following the death of the
beneficial owner of such Security (a "Survivor's Option"). Unless otherwise
specified in the Security, no Survivor's Option may be exercised if the deceased
beneficial owner of the Security or his or her Representative (as defined below)
held such Security for less than six months prior to the request for repayment
or repurchase.

      Pursuant to exercise of the Survivor's Option, the Company shall repay or
repurchase any Security (or portion thereof) properly tendered for repayment or
repurchase by or on behalf of the person (the "Representative") that has
authority to act on behalf of the deceased beneficial owner of a Security under
the laws of the appropriate jurisdiction (including, without limitation, the
personal representative, executor, surviving joint tenant or surviving tenant by
the entirety of such deceased beneficial owner) at a price equal to 100% of the
principal amount of the beneficial interest of the deceased owner in such
Security plus accrued interest to the date of such repayment or repurchase (or
such portion of the principal amount as may be specified in the terms of any
Original Issue Discount Securities on the date of such repayment or repurchase),
subject to the following limitations:

      a.    The Company may, in its sole discretion, limit the aggregate
            principal amount of Securities as to which exercises of the
            Survivor's Option shall be accepted in any calendar year (the
            "Annual Put Limitation") to 2% of the Outstanding principal amount
            of the Securities as of the end of the most recent calendar year,
            but not less than $1,000,000 in any such calendar year, or such
            greater amount as the Company in its sole discretion may determine
            for any calendar year, and may limit to $250,000, or such greater
            amount as the Company in its sole discretion may determine for any
            calendar year, the aggregate principal amount of Securities (or
            portions thereof) as to which exercise of the Survivor's Option will
            be accepted in such calendar year with respect to any individual
            deceased owner or beneficial interests in such Securities (the
            "Individual Put Limitation").


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      b.    The Company shall not make principal repayments pursuant to exercise
            of the Survivor's Option in amounts that are less than $1,000, and,
            in the event that the limitations described in the preceding
            sentence would result in the partial repayment of any Security, the
            principal amount of such Security remaining outstanding after
            repayment must be at least $1,000 (the minimum authorized
            denomination of the Securities).

      c.    Any Security (or portion thereof) tendered pursuant to a valid
            exercise of the Survivor's Option may not be withdrawn.

      Each Security (or portion thereof) that is tendered pursuant to valid
exercise of the Survivor's Option shall be accepted promptly in the order all
such Securities are tendered, except for any Security (or portion thereof) the
acceptance of which would contravene (i) the Annual Put Limitation, if applied,
or (ii) the Individual Put Limitation, if applied, with respect to the relevant
individual deceased owner of beneficial interests therein. If, as of the end of
any calendar year, the aggregate principal amount of Securities (or portions
thereof) that have been accepted pursuant to exercise of the Survivor's Option
during such year has exceeded either the Annual Put Limitation, if applied, or
the Individual Put Limitation, if applied, for such year, any exercise(s) of the
Survivor's Option with respect to Securities (or portions thereof) not accepted
during such calendar year because such acceptance would have contravened either
such limitation, if applied, shall be deemed to be tendered in the following
calendar year in the order all such Securities (or portions thereof) were
tendered. Normally, any Security (or portion thereof) accepted for repayment or
repurchase pursuant to exercise of the Survivor's Option shall be repaid or
repurchased on the first Interest Payment Date that occurs 20 or more calendar
days after the date of such acceptance. In the event that a Security (or any
portion thereof) tendered for repayment or repurchase pursuant to valid exercise
of the Survivor's Option is not accepted, the Trustee shall deliver a notice by
first-class mail to the registered holder thereof at its last known address as
indicated in the Security Register, that states the reason such Security (or
portion thereof) has not been accepted for payment.

      In order for a Survivor's Option to be validly exercised with respect to
any Security (or portion thereof), the Trustee must receive from the
Representative of the deceased owner (i) a written request for repayment or
repurchase signed by the Representative, and such signature must be guaranteed
by a member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States, (ii) tender of a
Security (or portion thereof) to be repaid, (iii) appropriate evidence
satisfactory to the Trustee that (A) the deceased was the owner of a beneficial
interest in such Security at the time of death and such beneficial interest in
was acquired by the deceased beneficial owner at least six months prior to such
request for repayment or repurchase, (B) the death of such beneficial owner has
occurred, (C) the date of death of such beneficial owner and (D) the
Representative has authority to act on behalf of the deceased beneficial owner,
(iv) if applicable, a properly executed assignment or endorsement, (v) if the
beneficial interest in such Security is held by a nominee of the deceased
beneficial owner, a certificate satisfactory to the Trustee from such nominee
attesting to the deceased's ownership of a beneficial interest in such Security,
(vi) tax waivers and such other instruments or documents that the Trustee
reasonably requires in order

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to establish the validity of beneficial ownership of the Securities and the
Claimants entitled to payment, and (vii) any additional information the Trustee
requires to evidence satisfaction of any conditions to the exercise of the
Survivor's Option or to document beneficial ownership or authority to make the
election and to cause the repayment or repurchase of the Securities. Subject to
the Company's right hereunder to limit the aggregate principal amount of
Securities as to which exercises of the Survivor's Option shall be accepted in
any one calendar year, all questions as to the eligibility or validity of any
exercise of the Survivor's Option will be determined by the Trustee, in its sole
discretion, which determination shall be final and binding on all parties.

      The death of a person owning a Security in joint tenancy or tenancy by the
entirety with another or others shall be deemed the death of the holder of the
Security, and the entire principal amount of the Security so held shall be
subject to repayment or repurchase, together with interest accrued thereon to
the repayment or repurchase date. The death of a person owning a Security by
tenancy in common shall be deemed the death of a holder of a Security only with
respect to the deceased holder's interest in the Security so held by tenancy in
common; except that in the event a Security is held by husband and wife as
tenants in common, the death of either shall be deemed the death of the holder
of the Security, and the entire principal amount of the Security so held shall
be subject to repayment or repurchase. The death of a person who, during his or
her lifetime, was entitled to substantially all of the beneficial interests of
ownership of a Security, shall be deemed the death of the holder thereof for
purposes of this provision, regardless of the registered holder, if such
beneficial interest can be established to the satisfaction of the Trustee. Such
beneficial interest shall be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Transfers to Minors Act or Uniform Gifts
to Minors Act, community property or other joint ownership arrangements between
a husband and wife and trust arrangements where one person has substantially all
of the beneficial ownership interest in the Security during his or her lifetime.

      For Securities represented by a Global Security, the Depository or its
nominee shall be the holder of such Security and therefore shall be the only
entity that can exercise the Survivor's Option for such Security. To obtain
repayment or repurchase pursuant to exercise of the Survivor's Option with
respect to such Security, the Representative must provide to the broker or other
entity through which the beneficial interest in such Security is held by the
deceased owner (i) the documents described in clauses (i), (iii), (iv), (v) and
(vi) of the second preceding paragraph and (ii) instructions to such broker or
other entity to notify the Depository of such Representative's desire to obtain
repayment or repurchase pursuant to exercise of the Survivor's Option. Such
broker or other entity shall provide to the Trustee (i) the documents received
from the Representative referred to in clause (i) of the preceding sentence and
(ii) a certificate satisfactory to the Trustee from such broker or other entity
stating that it represents the deceased beneficial owner. Such broker or other
entity shall be responsible for disbursing any payments it receives pursuant to
exercise of the Survivor's Option to the appropriate Representative.


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                                 ARTICLE Three

                             SUPPLEMENTAL INDENTURES
                             WITH CONSENT OF HOLDERS

      Section 3.01 CONSENT OF HOLDERS. Notwithstanding any provision to the
contrary contained in the Senior Indenture, for the purposes of Section 902 of
the Senior Indenture only, all Securities issued after the date of this
Supplemental Indenture No. 3 shall be deemed to constitute Securities of a
single series, unless the supplemental indenture or Officers' Certificate
pursuant to which any Securities are issued provides otherwise with respect to
such Securities.

                                  ARTICLE Four

                                    COVENANTS

      Section 4.01 WAIVER OF CERTAIN COVENANTS. Notwithstanding any provision to
the contrary contained in the Senior Indenture, for the purposes of Section 1006
of the Senior Indenture only, all Securities issued after the date of this
Supplemental Indenture No. 3 shall be deemed to constitute Securities of a
single series, unless the supplemental indenture or Officers' Certificate
pursuant to which any Securities are issued provides otherwise with respect to
such Securities.

                                  ARTICLE Five

                                  MISCELLANEOUS

      Section 5.01 Except as otherwise provided herein, all of the terms and
conditions of the Senior Indenture shall remain in full force and effect.

      Section 5.02 The Trustee assumes no responsibility for the correctness of
the recitals herein contained, which shall be taken as the statements of the
Company. The Trustee makes no representation and shall have no responsibility as
to the validity of this Supplemental Indenture No. 3.

      Section 5.03 In case of any provision in this Supplemental Indenture No. 3
shall be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Supplemental Indenture No. 3
or the Senior Indenture shall not in any way be affected or impaired thereby.

      Section 5.04 This Supplemental Indenture No. 3 shall be governed by and
construed in accordance with the laws of the State of New York. This
Supplemental Indenture No. 3 is


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subject to the provisions of the Trust Indenture Act of 1939, as amended, and
shall, to the extent applicable, be governed by such provisions.

      Section 5.05 This Supplemental Indenture No. 3 may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.



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      IN WITNESS WHEREOF, the Company and the Trustee have caused this
Supplemental Indenture No. 3 to be duly executed by their respective officers
thereunto duly authorized all as of the day and the year first above written.



PHH CORPORATION

By:  /s/ Eric J. Bock
     -------------------------------------------
     Name: Eric J. Bock
     Title: Executive Vice President - Law
     & Corporate Secretary



BANK ONE TRUST COMPANY, N.A.,
    as Trustee

By:  /s/ Sandra Whalen
     -------------------------------------------
     Name: Sandra Whalen
     Title:  Vice President