UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from           to
 Commission File No. 1-7797
 
 PHH CORPORATION
 (Exact name of registrant as specified in its charter)
 MARYLAND(State or other jurisdiction of 
incorporation or organization)
    
    52-0551284(I.R.S. Employer
Identification Number)3000 LEADENHALL ROAD 
MT. LAUREL, NEW JERSEY(Address of principal executive offices)
    
    08054(Zip Code)
 856-917-1744  (Registrants telephone number, including area code)
 
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




---



##### 



TABLE OF CONTENTS
 Item
    
    Description
    
    PageCautionary Note Regarding Forward-Looking Statements
    
    2PART I  FINANCIAL INFORMATION1
    
    Financial Statements
    
    5Condensed Consolidated Statements of Operations
    
    5Condensed Consolidated Balance Sheets
    
    6Condensed Consolidated Statement of Changes in Equity
    
    7Condensed Consolidated Statements of Cash Flows
    
    8Note 1. Summary of Significant Accounting Policies
    
    9Note 2. Earnings Per Share
    
    11Note 3. Mortgage Servicing Rights
    
    12Note 4. Loan Servicing Portfolio
    
    13Note 5. Mortgage Loan Sales
    
    14Note 6. Derivatives and Risk Management Activities
    
    16Note 7. Vehicle Leasing Activities
    
    19Note 8. Debt and Borrowing Arrangements
    
    20Note 9. Income Taxes
    
    25Note 10. Commitments and Contingencies
    
    25Note 11. Accumulated Other Comprehensive Income
    
    26Note 12. Fair Value Measurements
    
    27Note 13. Variable Interest Entities
    
    35Note 14. Segment Information
    
    38Note 15. Subsequent Events
    
    392
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    403
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    644
    
    Controls and Procedures
    
    68PART II  OTHER INFORMATION1
    
    Legal Proceedings
    
    681A
    
    Risk Factors
    
    682
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    693
    
    Defaults Upon Senior Securities
    
    694
    
    (Removed and Reserved)
    
    695
    
    Other Information
    
    696
    
    Exhibits
    
    69Signatures
    
    70Exhibit Index
    
    71
 1




---



##### 



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
    
    
    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, if
any, and the resulting potential volatility of the results of operations of our Mortgage
Servicing segment;
 2




---



##### 




    
    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 and the
Federal Home Loan Mortgage Corporation;
    
    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, including
the ability to timely implement and successfully execute our transformation initiatives;
    
    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 willingness or ability of automobile manufacturers 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;
    
    any failure to comply with certain financial covenants under our financing arrangements;
    
    the effects of the consolidation of financial institutions and the related impact on the
availability of credit;
    
    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.
 3




---



##### 



4




---



##### 



PART I  FINANCIAL INFORMATION
 Item 1. Financial Statements
 PHH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 (In millions, except per share data)
 Three MonthsEnded March 31,2010
    
    
    2009RevenuesMortgage fees
    
    $
    52
    
    
    $
    61Fleet management fees
    
    
    38
    
    
    
    37Net fee income
    
    
    90
    
    
    
    98Fleet lease income
    
    
    339
    
    
    
    364Gain on mortgage loans, net
    
    
    105
    
    
    
    188Mortgage interest income
    
    
    18
    
    
    
    25Mortgage interest expense
    
    
    (38
    )
    
    
    (36
    )Mortgage net finance expense
    
    
    (20
    )
    
    
    (11
    )Loan servicing income
    
    
    101
    
    
    
    100Change in fair value of mortgage servicing rights
    
    
    (52
    )
    
    
    (163
    )Net loan servicing income (loss)
    
    
    49
    
    
    
    (63
    )Other income
    
    
    14
    
    
    
    11Net revenues
    
    
    577
    
    
    
    587ExpensesSalaries and related expenses
    
    
    114
    
    
    
    115Occupancy and other office expenses
    
    
    15
    
    
    
    15Depreciation on operating leases
    
    
    308
    
    
    
    325Fleet interest expense
    
    
    23
    
    
    
    30Other depreciation and amortization
    
    
    6
    
    
    
    6Other operating expenses
    
    
    92
    
    
    
    91Total expenses
    
    
    558
    
    
    
    582Income before income taxes
    
    
    19
    
    
    
    5Provision for income taxes
    
    
    11
    
    
    
    Net income
    
    
    8
    
    
    
    5Less: net income attributable to noncontrolling interest
    
    
    
    
    
    
    3Net income attributable to PHH Corporation
    
    $
    8
    
    
    $
    2Basic and diluted earnings per share attributable to PHH Corporation
    
    $
    0.15
    
    
    $
    0.04
  5




---



##### 



PHH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 (In millions, except share data)
 March 31,
    
    
    December 31,2010
    
    
    2009ASSETSCash and cash equivalents (including $30 related to variable
interest entities (VIEs) as of March 31, 2010)
    
    $
    137
    
    
    $
    150Restricted cash (including $246 related to VIEs as of March 31, 2010)
    
    
    547
    
    
    
    596Mortgage loans held for sale (including $79 related to VIEs as of
March 31, 2010)
    
    
    1,253
    
    
    
    1,218Accounts receivable, net (including $27 related to VIEs as of March
31, 2010)
    
    
    480
    
    
    
    469Net investment in fleet leases (including $3,400 related to VIEs as
of March 31, 2010)
    
    
    3,600
    
    
    
    3,610Mortgage servicing rights
    
    
    1,458
    
    
    
    1,413Property, plant and equipment, net (including $1 related to VIEs as
of March 31, 2010)
    
    
    46
    
    
    
    49Goodwill
    
    
    25
    
    
    
    25Other assets (including $78 related to VIEs as of March 31, 2010)
    
    
    615
    
    
    
    593Total assets
    
    $
    8,161
    
    
    $
    8,123LIABILITIES AND EQUITYAccounts payable and accrued expenses (including $19 related to VIEs
as of March 31, 2010)
    
    $
    492
    
    
    $
    495Debt (including $3,027 related to VIEs as of March 31, 2010)
    
    
    5,138
    
    
    
    5,160Deferred income taxes
    
    
    704
    
    
    
    702Other liabilities (including $6 related to VIEs as of March 31, 2010)
    
    
    303
    
    
    
    262Total liabilities
    
    
    6,637
    
    
    
    6,619Commitments and contingencies (Note 10)
    
    
    
    
    
    
    EQUITYPreferred stock, $0.01 par value; 1,090,000 shares authorized at
March 31, 2010 and December 31, 2009; none issued or
outstanding at March 31, 2010 or December 31, 2009
    
    
    
    
    
    
    Common stock, $0.01 par value; 273,910,000 shares authorized at
March 31, 2010 and December 31, 2009; 55,333,856 shares issued and
outstanding at March 31, 2010; 54,774,639 shares issued and
outstanding at December 31, 2009
    
    
    1
    
    
    
    1Additional paid-in capital
    
    
    1,062
    
    
    
    1,056Retained earnings
    
    
    424
    
    
    
    416Accumulated other comprehensive income
    
    
    25
    
    
    
    19Total PHH Corporation stockholders equity
    
    
    1,512
    
    
    
    1,492Noncontrolling interest
    
    
    12
    
    
    
    12Total equity
    
    
    1,524
    
    
    
    1,504Total liabilities and equity
    
    $
    8,161
    
    
    $
    8,123
  6




---



##### 



PHH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Three Months Ended March 31, 2010
 (Unaudited)
(In millions, except share data)
 PHH Corporation StockholdersAccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Noncontrolling
    
    
    TotalShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Interest
    
    
    EquityBalance at December 31, 2009
    
    
    54,774,639
    
    
    $
    1
    
    
    $
    1,056
    
    
    $
    416
    
    
    $
    19
    
    
    $
    12
    
    
    $
    1,504Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    8Other comprehensive income, net
of income taxes of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Stock options exercised,
including excess tax benefit of
$0
    
    
    333,610
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Restricted stock award vesting,
net of excess tax benefit of $0
    
    
    225,607
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )Balance at March 31, 2010
    
    
    55,333,856
    
    
    $
    1
    
    
    $
    1,062
    
    
    $
    424
    
    
    $
    25
    
    
    $
    12
    
    
    $
    1,524
  7




---



##### 



PHH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
 Three MonthsEnded March 31,2010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    8
    
    
    $
    5Adjustments to reconcile Net income to net cash provided by (used
in) operating activities:Capitalization of originated mortgage servicing rights
    
    
    (97
    )
    
    
    (104
    )Net unrealized loss on mortgage servicing rights
    
    
    52
    
    
    
    163Vehicle depreciation
    
    
    308
    
    
    
    325Other depreciation and amortization
    
    
    6
    
    
    
    6Origination of mortgage loans held for sale
    
    
    (5,866
    )
    
    
    (6,911
    )Proceeds on sale of and payments from mortgage loans held for sale
    
    
    6,010
    
    
    
    6,045Net gain on interest rate lock commitments, mortgage loans
held for sale and related derivatives
    
    
    (165
    )
    
    
    (147
    )Deferred income tax provision (benefit)
    
    
    1
    
    
    
    (10
    )Other adjustments and changes in other assets and liabilities, net
    
    
    50
    
    
    
    101Net cash provided by (used in) operating activities
    
    
    307
    
    
    
    (527
    )Cash flows from investing activities:Investment in vehicles
    
    
    (376
    )
    
    
    (315
    )Proceeds on sale of investment vehicles
    
    
    87
    
    
    
    116Proceeds on sale of mortgage servicing rights and excess servicing
    
    
    3
    
    
    
    1Purchases of property, plant and equipment
    
    
    (3
    )
    
    
    (3
    )Decrease (increase) in Restricted cash
    
    
    49
    
    
    
    (23
    )Other, net
    
    
    4
    
    
    
    4Net cash used in investing activities
    
    
    (236
    )
    
    
    (220
    )Cash flows from financing activities:Proceeds from borrowings
    
    
    7,371
    
    
    
    10,363Principal payments on borrowings
    
    
    (7,449
    )
    
    
    (9,607
    )Issuances of Company Common Stock
    
    
    5
    
    
    
    Cash paid for debt issuance costs
    
    
    (7
    )
    
    
    (2
    )Other, net
    
    
    (2
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (82
    )
    
    
    754Effect of changes in exchange rates on Cash and cash equivalents
    
    
    (2
    )
    
    
    6Net (decrease) increase in Cash and cash equivalents
    
    
    (13
    )
    
    
    13Cash and cash equivalents at beginning of period
    
    
    150
    
    
    
    109Cash and cash equivalents at end of period
    
    $
    137
    
    
    $
    122
  8




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 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
 Transfers of Financial Assets .
 9




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  Consolidation of Variable Interest Entities .
 Fair Value Measurements.
 Recently Issued Accounting Pronouncements
 Revenue Recognition.
 10




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  2. Earnings Per Share
   Three MonthsEnded March 31,2010
    
    
    2009(In millions, exceptshare and per share data)Net income attributable to PHH Corporation
    
    $
    8
    
    
    $
    2Weighted-average common shares outstanding  basic
    
    
    55,035,745
    
    
    
    54,379,790Effect of potentially dilutive securities:Stock options
    
    
    133,102
    
    
    
    239Restricted stock units
    
    
    779,681
    
    
    
    160,114Weighted-average common shares outstanding  diluted
    
    
    55,948,528
    
    
    
    54,540,143Basic and diluted earnings per share attributable to PHH Corporation
    
    $
    0.15
    
    
    $
    0.04
 11




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 3. Mortgage Servicing Rights
  Three Months EndedMarch 31,2010
    
    
    2009(In millions)Balance, beginning of period
    
    $
    127,700
    
    
    $
    129,078Additions
    
    
    5,688
    
    
    
    5,220Payoffs, sales and curtailments
    
    
    (4,844
    )
    
    
    (7,509
    )Balance, end of period
    
    $
    128,544
    
    
    $
    126,789
  Three Months EndedMarch 31,2010
    
    
    2009(In millions)Mortgage Servicing Rights:Balance, beginning of period
    
    $
    1,413
    
    
    $
    1,282Additions
    
    
    97
    
    
    
    104Changes in fair value due to:Realization of expected cash flows
    
    
    (63
    )
    
    
    (92
    )Changes in market inputs or assumptions used in the valuation model
    
    
    11
    
    
    
    (71
    )Balance, end of period
    
    $
    1,458
    
    
    $
    1,223
  March 31,2010
    
    
    2009Prepayment speed (CPR)
    
    
    14
    %
    
    
    18
    %Option adjusted spread (in basis points)
    
    
    629
    
    
    
    458Volatility
    
    
    25
    %
    
    
    27
    %
  Three Months EndedMarch 31,2010
    
    
    2009(In millions)Net service fee revenue
    
    $
    97
    
    
    $
    107Late fees
    
    
    5
    
    
    
    5Other ancillary servicing revenue
    
    
    10
    
    
    
    5
  12




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  Three MonthsEnded March 31,2010
    
    
    2009Initial capitalization rate of additions to MSRs
    
    
    1.70
    %
    
    
    1.99
    %Weighted-average servicing fee of additions to MSRs (in basis points)
    
    
    30
    
    
    
    39
 March 31,2010
    
    
    2009Capitalized servicing rate
    
    
    1.13
    %
    
    
    0.97
    %Capitalized servicing multiple
    
    
    3.7
    
    
    
    2.9Weighted-average servicing fee (in basis points)
    
    
    30
    
    
    
    33
 4. Loan Servicing Portfolio
  Portfolio Activity
 Three MonthsEnded March 31,2010
    
    
    2009(In millions)Balance, beginning of period
    
    $
    151,481
    
    
    $
    149,750Additions
    
    
    7,070
    
    
    
    7,548Payoffs, sales and curtailments
    
    
    (5,491
    )
    
    
    (8,115
    )Balance, end of period
    
    $
    153,060
    
    
    $
    149,183
 Portfolio Composition
 March 31,2010
    
    
    2009(In millions)Owned servicing portfolio
    
    $
    130,472
    
    
    $
    129,587Subserviced portfolio
    
    
    22,588
    
    
    
    19,596Total servicing portfolio
    
    $
    153,060
    
    
    $
    149,183Fixed rate
    
    $
    104,259
    
    
    $
    96,008Adjustable rate
    
    
    48,801
    
    
    
    53,175Total servicing portfolio
    
    $
    153,060
    
    
    $
    149,183Conventional loans
    
    $
    130,075
    
    
    $
    131,299Government loans
    
    
    16,221
    
    
    
    11,103Home equity lines of credit
    
    
    6,764
    
    
    
    6,781Total servicing portfolio
    
    $
    153,060
    
    
    $
    149,183Weighted-average interest rate
    
    
    5.2
    %
    
    
    5.6
    %
 13




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Portfolio Delinquency (1)
 March 31,2010
    
    
    2009Number
    
    
    Unpaid
    
    
    Number
    
    
    Unpaidof Loans
    
    
    Balance
    
    
    of Loans
    
    
    Balance30 days
    
    
    2.13
    %
    
    
    1.88
    %
    
    
    2.24
    %
    
    
    2.04
    %60 days
    
    
    0.48
    %
    
    
    0.48
    %
    
    
    0.57
    %
    
    
    0.57
    %90 or more days
    
    
    1.81
    %
    
    
    1.97
    %
    
    
    0.77
    %
    
    
    0.83
    %Total delinquency
    
    
    4.42
    %
    
    
    4.33
    %
    
    
    3.58
    %
    
    
    3.44
    %Foreclosure/real estate owned/bankruptcies
    
    
    2.71
    %
    
    
    2.73
    %
    
    
    2.26
    %
    
    
    2.27
    %
 
 (1)
    
    Represents the loan servicing portfolio delinquencies as a percentage of the
total number of loans and the total unpaid balance of the portfolio.  5. Mortgage Loan Sales
  14




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  MSRs(In millions)Fair value of retained interests
    
    $
    1,458Weighted-average life (in years)
    
    
    5.7Weighted-average servicing fee (in basis points)
    
    
    30Prepayment speed (annual rate)
    
    
    14
    %Impact on fair value of 10% adverse change
    
    $
    (78
    )Impact on fair value of 20% adverse change
    
    
    (148
    )Option adjusted spread (basis points)
    
    
    629Impact on fair value of 10% adverse change
    
    $
    (61
    )Impact on fair value of 20% adverse change
    
    
    (118
    )Volatility (annual rate)
    
    
    25
    %Impact on fair value of 10% adverse change
    
    $
    (21
    )Impact on fair value of 20% adverse change
    
    
    (43
    )
   Three Months EndedMarch 31,2010
    
    
    2009(In millions)Proceeds from new loan sales or securitizations
    
    $
    5,763
    
    
    $
    5,261Servicing fees received (1)
    
    
    97
    
    
    
    107Other cash flows received on retained interests (2)
    
    
    
    
    
    
    3Purchases of delinquent or foreclosed loans
    
    
    (27
    )
    
    
    (27
    )Servicing advances
    
    
    (344
    )
    
    
    (236
    )Repayment of servicing advances
    
    
    338
    
    
    
    253
 
 (1)
    
    Excludes late fees and other ancillary servicing revenue.(2)
    
    Represents cash flows received on retained interests other than servicing fees.  15




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 6. Derivatives and Risk Management Activities
  March 31, 2010Asset Derivatives
    
    
    Liability DerivativesBalance
    
    
    
    
    
    
    
    
    
    
    BalanceSheet
    
    
    Fair
    
    
    Notional
    
    
    Sheet
    
    
    Fair
    
    
    NotionalPresentation
    
    
    Value
    
    
    Amount
    
    
    Presentation
    
    
    Value
    
    
    Amount(In millions)Interest rate lock
commitments (IRLCs)
    
    Other assets
    
    $
    55
    
    
    $
    4,173
    
    
    Other liabilities
    
    $
    4
    
    
    $
    346Forward delivery commitments
not subject to master netting
arrangements:Related to interest rate and
price risk for MLHS and
IRLCs
    
    Other assets
    
    
    15
    
    
    
    2,457
    
    
    Other liabilities
    
    
    3
    
    
    
    896Forward delivery commitments
subject to master netting
arrangements(1):Related to interest rate and
price risk for MLHS and
IRLCs
    
    Other assets
    
    
    10
    
    
    
    1,828
    
    
    Other assets
    
    
    5
    
    
    
    1,093Related to interest rate and
price risk for MLHS and
IRLCs
    
    Other liabilities
    
    
    1
    
    
    
    488
    
    
    Other liabilities
    
    
    1
    
    
    
    420Contracts related to interest
rate risk for debt arrangements
and variable-rate leases
    
    Other assets
    
    
    5
    
    
    
    712
    
    
    
    N/A
    
    
    
    
    
    
    
    Derivative instruments related
to the issuance of the 2014
Convertible Notes(2)
    
    Other assets
    
    
    72
    
    
    
    
    
    
    Other liabilities
    
    
    72
    
    
    
    Foreign exchange contracts
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    Other liabilities
    
    
    3
    
    
    
    80Total derivative instruments
    
    
    
    
    
    
    158
    
    
    
    
    
    
    
    
    
    
    
    88Impact of master netting
arrangements(1)
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    (6
    )Cash collateral
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    Net fair value of derivative
instruments
    
    
    
    
    
    $
    153
    
    
    
    
    
    
    
    
    
    
    $
    82
 16




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 December 31, 2009Asset Derivatives
    
    
    Liability DerivativesBalance
    
    
    
    
    
    
    
    
    
    
    BalanceSheet
    
    
    Fair
    
    
    Notional
    
    
    Sheet
    
    
    Fair
    
    
    NotionalPresentation
    
    
    Value
    
    
    Amount
    
    
    Presentation
    
    
    Value
    
    
    Amount(In millions)IRLCs
    
    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 as of
both March 31, 2010 and December 31, 2009. 17




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  Statement of
    
    
    Three Months EndedOperations
    
    
    March 31,Presentation
    
    
    2010
    
    
    2009(In millions)IRLCs
    
    Gain on mortgage loans, net
    
    $
    202
    
    
    $
    169Forward delivery commitments
related to interest rate and
price risk for MLHS and IRLCs
    
    Gain on mortgage loans, net
    
    
    (57
    )
    
    
    (46
    )Contracts related to interest
rate risk for debt arrangements
and variable-rate leases
    
    Fleet interest expense
    
    
    (3
    )
    
    
    (1
    )Foreign exchange contracts
    
    Fleet interest expense
    
    
    (1
    )
    
    
    4Total derivative instruments
    
    
    
    
    
    $
    141
    
    
    $
    126
  Foreign Exchange.
 18




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 7. Vehicle Leasing Activities
  March 31,
    
    
    December 31,2010
    
    
    2009(In millions)Operating Leases:Vehicles under open-end operating leases
    
    $
    7,447
    
    
    $
    7,446Vehicles under closed-end operating leases
    
    
    262
    
    
    
    263Vehicles under operating leases
    
    
    7,709
    
    
    
    7,709Less: Accumulated depreciation
    
    
    (4,438
    )
    
    
    (4,382
    )Net investment in operating leases
    
    
    3,271
    
    
    
    3,327Direct Financing Leases:Lease payments receivable
    
    
    120
    
    
    
    121Less: Unearned income
    
    
    (4
    )
    
    
    (4
    )Net investment in direct financing leases
    
    
    116
    
    
    
    117Off-Lease Vehicles:Vehicles not yet subject to a lease
    
    
    208
    
    
    
    164Vehicles held for sale
    
    
    11
    
    
    
    9Less: Accumulated depreciation
    
    
    (6
    )
    
    
    (7
    )Net investment in off-lease vehicles
    
    
    213
    
    
    
    166Net investment in fleet leases
    
    $
    3,600
    
    
    $
    3,610
 March 31,
    
    
    December 31,2010
    
    
    2009Vehicles under open-end leases
    
    
    96
    %
    
    
    95
    %Vehicles under closed-end leases
    
    
    4
    %
    
    
    5
    %Vehicles under variable-rate leases
    
    
    76
    %
    
    
    76
    %Vehicles under fixed-rate leases
    
    
    24
    %
    
    
    24
    %
 19




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 8. Debt and Borrowing Arrangements
  March 31, 2010Assets 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
    
    $
    442
    
    
    $
    442
    
    
    
    
    
    
    
    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)
    
    
    25
    
    
    
    25
    
    
    
    
    
    
    
    2/17/2011Chesapeake Series 2009-3 Class A Term Notes
    
    
    50
    
    
    
    50
    
    
    
    
    
    
    
    10/20/2011Chesapeake Series 2009-4 Class A Term Notes
    
    
    250
    
    
    
    250
    
    
    
    
    
    
    
    2/18/2010FLRT Series 2010-1 Class A Notes(8)
    
    
    330
    
    
    
    330
    
    
    
    
    
    
    
    2/2011-11/2013Other
    
    
    44
    
    
    
    44
    
    
    
    
    
    
    
    6/2010-6/2016Total Vehicle Management Asset-Backed Debt
    
    
    3,019
    
    
    
    3,019
    
    
    
    2.0
    %(9)
    
    
    
    
    
    $
    22
    
    
    $
    246
    
    
    $
    
    
    
    $
    3,435RBS Repurchase Facility(10)
    
    
    562
    
    
    
    1,500
    
    
    
    3.0
    %
    
    
    6/24/2010
    
    
    
    
    
    
    
    
    
    
    
    593
    
    
    
    Fannie Mae Repurchase Facilities(11)
    
    
    391
    
    
    
    391
    
    
    
    1.0
    %
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    393
    
    
    
    Other (12)
    
    
    53
    
    
    
    83
    
    
    
    2.7
    %
    
    
    9/2010-10/2010
    
    
    
    59
    
    
    
    
    
    
    
    3
    
    
    
    Total Mortgage Warehouse Asset-Backed Debt
    
    
    1,006
    
    
    
    1,974
    
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    989
    
    
    
    Term Notes(13)
    
    
    438
    
    
    
    438
    
    
    
    6.5%-7.9
    %(14)
    
    
    4/2010-4/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Credit Facilities(15)
    
    
    230
    
    
    
    1,305
    
    
    
    1.0
    %(16)
    
    
    1/6/2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Convertible Notes due 2012(17)
    
    
    225
    
    
    
    225
    
    
    
    4.0
    %
    
    
    4/15/2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Convertible Notes due 2014(18)
    
    
    183
    
    
    
    183
    
    
    
    4.0
    %
    
    
    9/1/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Unsecured Debt
    
    
    1,076
    
    
    
    2,151
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mortgage Loan Securitization Debt Certificates, at Fair Value
    
    
    37
    
    
    
    37
    
    
    
    7.0
    %
    
    
    12/2027
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Debt
    
    $
    5,138
    
    
    $
    7,181
    
    
    
    
    
    
    
    
    
    
    $
    81
    
    
    $
    246
    
    
    $
    989
    
    
    $
    3,435
 20




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 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
    %(9)
    
    
    
    
    
    $
    21
    
    
    $
    297
    
    
    $
    
    
    
    $
    3,082RBS Repurchase Facility(10)
    
    
    622
    
    
    
    1,500
    
    
    
    3.0
    %
    
    
    6/24/2010
    
    
    
    
    
    
    
    1
    
    
    
    667
    
    
    
    Fannie Mae Repurchase Facilities(11)
    
    
    325
    
    
    
    325
    
    
    
    1.0
    %
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    333
    
    
    
    Other (12)
    
    
    49
    
    
    
    60
    
    
    
    2.7
    %
    
    
    9/2010-10/2010
    
    
    
    52
    
    
    
    
    
    
    
    5
    
    
    
    Total Mortgage Warehouse Asset-Backed Debt
    
    
    996
    
    
    
    1,885
    
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    1
    
    
    
    1,005
    
    
    
    Term Notes(13)
    
    
    439
    
    
    
    439
    
    
    
    6.5%- 7.9
    %(14)
    
    
    4/2010- 4/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Credit Facilities(15)
    
    
    432
    
    
    
    1,305
    
    
    
    1.0
    %(16)
    
    
    1/6/2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Convertible Notes due 2012(17)
    
    
    221
    
    
    
    221
    
    
    
    4.0
    %
    
    
    4/15/2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Convertible Notes due 2014(18)
    
    
    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 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) and Series 2010-1 Class A Notes (as
defined below) have revolving periods during which time the pro-rata share of lease cash flows
pledged to Chesapeake and FLRT, respectively, 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 the respective date, with the exception
of total vehicle management asset-backed debt, term notes, the 2014 Convertible Notes and 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 Funding LLC (Chesapeake) will create availability to fund the
acquisition of vehicles to be leased to customers of the Companys 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. 21




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 (5)
    
    The titles to all the vehicles collateralizing the debt issued by 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 February 26, 2009 (the Scheduled Expiry Date). 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 March 31, 2010 is net of an unamortized discount of $3 million and $4 million,
respectively. See Asset-Backed DebtVehicle Management Asset-Backed Debt below for
additional information.(8)
    
    On January 27, 2010, FLRT issued approximately $119 million of senior Class A-1
term asset-backed notes which was comprised of two subclasses of senior term asset backed
notes (the Series 2010-1 Class A-1 Notes) and approximately $224 million of senior Class A-2
term asset-backed notes which was comprised of two subclasses of senior term asset backed
notes (the Series 2010-1 Class A-2 Notes and together with the Series 2010-1 Class A-1
Notes, collectively the Series 2010-1 Class A Notes) to finance a fixed pool of eligible
lease assets in Canada. Three of the four subclasses of Series 2010-1 Class A Notes were
denominated in Canadian dollars with the remaining subclass of Series 2010-1 Class A Notes
denominated in U.S. dollars. The Series 2010-1 Class A-1 notes and Class A-2 notes are
amortizing notes and have maturity dates of February 15, 2011 and November 15, 2013,
respectively.(9)
    
    Represents the weighted-average interest rate of the Companys vehicle management
asset-backed debt arrangements as of March 31, 2010 and December 31, 2009, respectively.(10)
    
    The Company maintains a variable-rate committed mortgage repurchase facility (the
RBS Repurchase Facility) with The Royal Bank of Scotland plc (RBS).(11)
    
    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 as of
both March 31, 2010 and December 31, 2009.(12)
    
    Represents the variable interest rate on the majority of other mortgage warehouse
asset-backed debt as of March 31, 2010 and December 31, 2009, respectively. The outstanding
balance as of March 31, 2010 and December 31, 2009 also includes $3 million and $5 million,
respectively, outstanding under another variable-rate mortgage warehouse facility that bore
interest at 4.0% and 3.1%, respectively.(13)
    
    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.(14)
    
    Represents the range of stated interest rates of the MTNs outstanding as of March
31, 2010 and December 31, 2009, respectively. The effective rate of interest of the Companys
outstanding MTNs was 7.2% as of both March 31, 2010 and December 31, 2009.(15)
    
    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.(16)
    
    Represents the interest rate on the Amended Credit Facility as of March 31, 2010
and December 31, 2009, respectively, excluding per annum utilization and facility fees. The
outstanding balance as of March 31, 2010 and December 31, 2009 also includes $65 million and
$72 million, respectively, outstanding under another variable-rate credit facility that bore
interest at 1.1% and 1.0%, respectively. See Unsecured DebtCredit Facilities below for
additional information.(17)
    
    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 March 31, 2010 and December 31, 2009 is net of an unamortized discount
of $25 million and $29 million, respectively. The effective rate of interest of the 2012
Convertible Notes was 12.4% as of both March 31, 2010 and 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 the three months ended March
31, 2010.(18)
    
    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 March 31, 2010 and December 31, 2009 is net of
an unamortized discount of $67 million and $70 million, respectively. The effective rate of
interest of the 2014 Convertible Notes was 13.0% as of both March 31, 2010 and 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 three
months ended March 31, 2010.  22




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Asset-Backed Debt
 Vehicle Management Asset-Backed Debt
    Unsecured Debt
 Credit Facilities
  23




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Debt Maturities
  Asset-Backed
    
    
    Unsecured
    
    
    Total(In millions)Within one year
    
    $
    1,943
    
    
    $
    235
    
    
    $
    2,178Between one and two years
    
    
    1,026
    
    
    
    
    
    
    
    1,026Between two and three years
    
    
    646
    
    
    
    671
    
    
    
    1,317Between three and four years
    
    
    361
    
    
    
    
    
    
    
    361Between four and five years
    
    
    75
    
    
    
    250
    
    
    
    325Thereafter
    
    
    17
    
    
    
    8
    
    
    
    25$
    4,068
    
    
    $
    1,164
    
    
    $
    5,232
  Utilized
    
    
    AvailableCapacity(1)
    
    
    Capacity
    
    
    Capacity(In millions)Asset-Backed Funding ArrangementsVehicle management(2)
    
    $
    3,019
    
    
    $
    3,019
    
    
    $
    Mortgage warehouse(3)
    
    
    1,974
    
    
    
    1,280
    
    
    
    694Unsecured Committed Credit Facilities(4)
    
    
    1,305
    
    
    
    246
    
    
    
    1,059
 
 (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 the Company is unable to borrow additional amounts under these notes. The
amount outstanding under the Series 2006-2 notes was $442 million as of March 31, 2010. 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 $2.6 billion undrawn under the $3.0 billion Fannie Mae
Repurchase Facilities, as these facilities are uncommitted. Utilized capacity reflects $274
million of mortgage loans sold to RBS under the terms of the RBS Repurchase Facility. The
mortgage loans and related Debt are not included in the Companys Condensed Consolidated
Balance Sheet as of March 31, 2010.(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 Condensed Consolidated
Balance Sheet. Debt Covenants
  24




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
   9. Income Taxes
    10. Commitments and Contingencies
 Loan Recourse
  25




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  Mortgage Reinsurance
   Three Months EndedMarch 31,2010
    
    
    2009(In millions)Balance, January 1,
    
    $
    108
    
    
    $
    83Realized reinsurance losses
    
    
    (2
    )
    
    
    Increase in reinsurance reserves
    
    
    11
    
    
    
    14Balance, March 31,
    
    $
    117
    
    
    $
    97
 11. Accumulated Other Comprehensive Income
  Three MonthsEnded March 31,2010
    
    
    2009(In millions)Net income attributable to PHH Corporation
    
    $
    8
    
    
    $
    2Other comprehensive income (loss):Currency translation adjustments
    
    
    6
    
    
    
    (4
    )Total other comprehensive income (loss)
    
    
    6
    
    
    
    (4
    )Total comprehensive income (loss)
    
    $
    14
    
    
    $
    (2
    )
 26




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  Currency
    
    
    
    
    
    
    AccumulatedTranslation
    
    
    Pension
    
    
    Other ComprehensiveAdjustment
    
    
    Adjustment
    
    
    Income(In millions)Balance at December 31, 2009
    
    $
    27
    
    
    $
    (8
    )
    
    $
    19Change during 2010
    
    
    6
    
    
    
    
    
    
    
    6Balance at March 31, 2010
    
    $
    33
    
    
    $
    (8
    )
    
    $
    25
  12. Fair Value Measurements
  Level One .
 Level Two .
 Level Three .
  27




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  Mortgage Loans Held for Sale.
    AggregateUnpaidPrincipalAggregate
    
    
    BalanceUnpaid
    
    
    OverCarrying
    
    
    Principal
    
    
    CarryingAmount
    
    
    Balance
    
    
    Amount(In millions)Mortgage loans held for sale:Total
    
    $
    1,253
    
    
    $
    1,273
    
    
    $
    20Loans 90 or more days past due and on non-accrual status
    
    
    14
    
    
    
    25
    
    
    
    11
 28




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  March 31,2010(In millions)First mortgages:Conforming(1)
    
    $
    1,158Non-conforming
    
    
    21Alt-A(2)
    
    
    1Construction loans
    
    
    14Total first mortgages
    
    
    1,194Second lien
    
    
    12Scratch and Dent(3)
    
    
    45Other
    
    
    2Total
    
    $
    1,253
 
 (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. Securitized Mortgage Loans.
   Derivative Instruments .
 Forward Delivery Commitments
  29




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Interest Rate Lock Commitments
  Mortgage Servicing Rights
 Mortgage Loan Securitization Debt Certificates.
   30




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  March 31, 2010CashLevel
    
    
    Level
    
    
    Level
    
    
    Collateral andOne
    
    
    Two
    
    
    Three
    
    
    Netting(1)
    
    
    Total(In millions)Assets:Mortgage loans held for sale
    
    $
    
    
    
    $
    1,161
    
    
    $
    92
    
    
    $
    
    
    
    $
    1,253Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    1,458
    
    
    
    
    
    
    
    1,458Other assets:Investment securities
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Derivative assets:IRLCs
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    55Forward delivery
commitments related to
interest rate and price
risk for MLHS and IRLCs
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    (5
    )
    
    
    21Contracts related to
interest rate risk for
debt arrangements and
variable-rate leases
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Derivative instruments
related to the issuance
of the 2014 Convertible
Notes
    
    
    
    
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    72Securitized mortgage loans
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    49Liabilities:Other liabilities:Derivative liabilities:IRLCs
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Forward delivery
commitments related to
interest rate and price
risk for MLHS and IRLCs
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    (6
    )
    
    
    3Derivative instruments
related to the issuance
of the 2014 Convertible
Notes
    
    
    
    
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    72Foreign exchange contracts
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3Debt:Mortgage loan securitization
debt certificates
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    37
 31




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 December 31, 2009CashLevel
    
    
    Level
    
    
    Level
    
    
    Collateral andOne
    
    
    Two
    
    
    Three
    
    
    Netting(1)
    
    
    Total(In millions)Assets:Mortgage loans held for sale
    
    $
    
    
    
    $
    1,107
    
    
    $
    111
    
    
    $
    
    
    
    $
    1,218Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    1,413
    
    
    
    
    
    
    
    1,413Other assets:Investment securities
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    12Derivative assets
    
    
    
    
    
    
    86
    
    
    
    68
    
    
    
    (10
    )
    
    
    144Liabilities:Other liabilities:Derivative liabilities
    
    
    
    
    
    
    15
    
    
    
    42
    
    
    
    (5
    )
    
    
    52
 
 (1)
    
    Adjustments to arrive at the carrying amounts of assets and liabilities
presented in the Condensed Consolidated Balance Sheets which represent the effect of netting
the payable or receivable and cash collateral held or placed with the same counterparties
under master netting arrangements between the Company and its counterparties.  Three Months Ended March 31, 2010Realized
    
    
    Purchases,Balance,
    
    
    and
    
    
    Issuances
    
    
    Transfers
    
    
    Transfers
    
    
    
    
    
    
    Balance,Beginning
    
    
    Unrealized
    
    
    and
    
    
    Into
    
    
    Out of
    
    
    
    
    
    
    Endof
    
    
    (Losses)
    
    
    Settlements,
    
    
    Level
    
    
    Level
    
    
    Transition
    
    
    ofPeriod
    
    
    Gains
    
    
    net
    
    
    Three(1)
    
    
    Three(2)
    
    
    Adjustment(3)
    
    
    PeriodAssets:Mortgage loans held for sale
    
    $
    111
    
    
    
    (1
    )
    
    
    (22
    )
    
    
    18
    
    
    
    (14
    )
    
    
    
    
    
    $
    92Mortgage servicing rights
    
    
    1,413
    
    
    
    (52
    )
    
    
    97
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,458Other assets:Investment securities
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11
    )
    
    
    1IRLCs, net
    
    
    26
    
    
    
    202
    
    
    
    (177
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51Securitized mortgage
loans
    
    
    
    
    
    
    2
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    51
    
    
    
    49Liabilities:Debt:Mortgage loan securitization
debt certificates
    
    
    
    
    
    
    1
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    37
 32




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Three Months Ended March 31, 2009Realized
    
    
    Purchases,
    
    
    TransfersBalance,
    
    
    and
    
    
    Issuances
    
    
    Out of
    
    
    Balance,Beginning
    
    
    Unrealized
    
    
    and
    
    
    Level
    
    
    Endof
    
    
    (Losses)
    
    
    Settlements,
    
    
    Three,
    
    
    ofPeriod
    
    
    Gains
    
    
    net
    
    
    net
    
    
    Period(In millions)Assets:Mortgage loans held for sale
    
    $
    177
    
    
    $
    (17
    )
    
    $
    (29
    )
    
    $
    (6
    )(5)
    
    $
    125Mortgage servicing rights
    
    
    1,282
    
    
    
    (163
    )(4)
    
    
    104
    
    
    
    
    
    
    
    1,223Other assets:Investment securities
    
    
    37
    
    
    
    (2
    )
    
    
    (3
    )
    
    
    
    
    
    
    32Derivatives, net
    
    
    70
    
    
    
    169
    
    
    
    (118
    )
    
    
    
    
    
    
    121
 
 (1)
    
    Represents transfers to Scratch and Dent loans that converted from conforming
loans during the three months ended March 31, 2010.(2)
    
    Represents Scratch and Dent and construction loans that were foreclosed upon,
construction loans that converted to first mortgages and Scratch and Dent loans with
origination flaws that were corrected during the three months ended March 31, 2010. The
Companys mortgage loans in foreclosure are measured at fair value on a non-recurring basis,
as discussed in further detail below.(3)
    
    Represents the transition adjustment related to the adoption of ASC 810 and ASC 860
resulting in the consolidation of a mortgage loan securitization trust (See Note 1, Summary
of Significant Accounting Policies and Note 13, Variable Interest Entities for additional
information).(4)
    
    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.(5)
    
    Represents Scratch and Dent loans that were foreclosed upon and construction loans
that converted to first mortgages during the three months ended March 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.  Three Months Ended March 31, 2010Mortgage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MortgageLoans
    
    
    Mortgage
    
    
    
    
    
    
    Securitized
    
    
    Loan SecuritizationHeld for
    
    
    Servicing
    
    
    
    
    
    
    Mortgage
    
    
    DebtSale
    
    
    Rights
    
    
    IRLCs
    
    
    Loans
    
    
    Certificates(In millions)Gain on mortgage loans, net
    
    $
    (4
    )
    
    $
    
    
    
    $
    202
    
    
    $
    
    
    
    $
    Change in fair value of
mortgage servicing rights
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    Mortgage interest income
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    Mortgage interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
 33




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Three Months Ended March 31, 2009MortgageLoans
    
    
    MortgageHeld for
    
    
    Servicing
    
    
    Investment
    
    
    Derivatives,Sale
    
    
    Rights
    
    
    Securities
    
    
    net(In millions)Gain on mortgage loans, net
    
    $
    (19
    )
    
    $
    
    
    
    $
    
    
    
    $
    169Change in fair value of mortgage servicing rights
    
    
    
    
    
    
    (163
    )
    
    
    
    
    
    
    Mortgage interest income
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    Other income
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
  Three Months Ended March 31, 2010Change inFair ValueGain on
    
    
    of Mortgage
    
    
    MortgageMortgage
    
    
    Servicing
    
    
    Interest
    
    
    OtherLoans, net
    
    
    Rights
    
    
    Income
    
    
    Income(In millions)Unrealized gain
    
    $
    44
    
    
    $
    11
    
    
    $
    1
    
    
    $
    1
 Three Months Ended March 31, 2009Change inFair ValueGain on
    
    
    of Mortgage
    
    
    MortgageMortgage
    
    
    Servicing
    
    
    Interest
    
    
    OtherLoans, net
    
    
    Rights
    
    
    Income
    
    
    Income(In millions)Unrealized gain (loss)
    
    $
    101
    
    
    $
    (71
    )
    
    $
    1
    
    
    $
    (2
    )
    34




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
   March 31,
    
    
    December 31,2010
    
    
    2009(In millions)Mortgage loans in foreclosure
    
    $
    114
    
    
    $
    113Allowance for probable losses
    
    
    (20
    )
    
    
    (20
    )Mortgage loans in foreclosure, net
    
    $
    94
    
    
    $
    93REO
    
    $
    45
    
    
    $
    51Adjustment to estimated net realizable value
    
    
    (16
    )
    
    
    (15
    )REO, net
    
    $
    29
    
    
    $
    36
  13. Variable Interest Entities
  35




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Mortgage Venture
    March 31,
    
    
    December 31,2010
    
    
    2009(In millions)ASSETSCash
    
    $
    24
    
    
    $
    40Mortgage loans held for sale
    
    
    76
    
    
    
    60Accounts receivable, net
    
    
    2
    
    
    
    2Property, plant and equipment, net
    
    
    1
    
    
    
    1Other assets
    
    
    6
    
    
    
    6Total assets
    
    $
    109
    
    
    $
    109LIABILITIESAccounts payable and accrued expenses
    
    $
    15
    
    
    $
    14Other liabilities
    
    
    3
    
    
    
    2Total liabilities(1)
    
    $
    18
    
    
    $
    16
 
 (1)
    
    Total liabilities exclude $12 million and $15 million of intercompany payables
as of March 31, 2010 and December 31, 2009, respectively.   Mortgage Loan Securitization Trust
  36




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  Chesapeake and D.L. Peterson Trust
  March 31,
    
    
    December 31,2010
    
    
    2009(In millions)ASSETSCash and cash equivalents
    
    $
    3
    
    
    $
    3Restricted cash(1)
    
    
    221
    
    
    
    297Accounts receivable
    
    
    22
    
    
    
    21Net investment in fleet leases
    
    
    2,988
    
    
    
    3,046Other assets
    
    
    18
    
    
    
    22Total assets(2)
    
    $
    3,252
    
    
    $
    3,389LIABILITIESAccounts payable and accrued expenses
    
    
    3
    
    
    
    3Debt(3)
    
    
    2,645
    
    
    
    2,859Total liabilities
    
    $
    2,648
    
    
    $
    2,862
 
 (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 8, Debt and Borrowing Arrangements for assets held as collateral related
to the Companys vehicle management asset-backed debt arrangements, which are not available to
pay the Companys general obligations.(3)
    
    See Note 8, Debt and Borrowing Arrangements for additional information regarding
the variable funding and term notes issued by Chesapeake. Fleet Leasing Receivables Trust
   37




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
  March 31,2010(In millions)ASSETSRestricted cash(1)
    
    $
    25Accounts receivable
    
    
    3Net investment in fleet leases
    
    
    412Other assets
    
    
    5Total assets(2)
    
    $
    445LIABILITIESDebt
    
    $
    330Other liabilities
    
    
    3Total liabilities
    
    $
    333
 
 (1)
    
    Restricted cash primarily relates to amounts specifically designated to repay
debt and/or to provide over-collateralization related to the Companys vehicle management
asset-backed debt arrangements.(2)
    
    See Note 8, Debt and Borrowing Arrangements for assets held as collateral related
to the Companys vehicle management asset-backed debt arrangements, which are not available to
pay the Companys general obligations. 14. Segment Information
    Net Revenues
    
    
    Segment Profit (Loss)(1)Three Months
    
    
    
    
    
    
    Three MonthsEnded March 31,
    
    
    
    
    
    
    Ended March 31,2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    Change(In millions)Mortgage Production segment
    
    $
    152
    
    
    $
    248
    
    
    $
    (96
    )
    
    $
    25
    
    
    $
    113
    
    
    $
    (88
    )Mortgage Servicing segment
    
    
    36
    
    
    
    (74
    )
    
    
    110
    
    
    
    (13
    )
    
    
    (118
    )
    
    
    105Combined Mortgage Services segments
    
    
    188
    
    
    
    174
    
    
    
    14
    
    
    
    12
    
    
    
    (5
    )
    
    
    17Fleet Management Services segment
    
    
    390
    
    
    
    414
    
    
    
    (24
    )
    
    
    8
    
    
    
    7
    
    
    
    1Total reportable segments
    
    
    578
    
    
    
    588
    
    
    
    (10
    )
    
    
    20
    
    
    
    2
    
    
    
    18Other (2)
    
    
    (1
    )
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Total Company
    
    $
    577
    
    
    $
    587
    
    
    $
    (10
    )
    
    $
    19
    
    
    $
    2
    
    
    $
    17
 
 (1)
    
    The following is a reconciliation of Income before income taxes to segment
profit: 38




---



##### 



PHH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Unaudited)
 Three MonthsEnded March 31,2010
    
    
    2009(In millions)Income before income taxes
    
    $
    19
    
    
    $
    5Less: net income attributable to noncontrolling interest
    
    
    
    
    
    
    3Segment profit
    
    $
    19
    
    
    $
    2
 
 (2)
    
    Amounts included under the heading Other represent intersegment eliminations and
amounts not allocated to the Companys reportable segments. Segment loss included under the
heading Other for three months ended March 31, 2010 represents severance costs for the Companys
former chief executive officer. 15. Subsequent Events
  39




---



##### 



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 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. This Item
2 should be read in conjunction with the Cautionary Note Regarding Forward-Looking Statements,
Item 1A. Risk Factors and our Condensed Consolidated Financial Statements and notes thereto
included in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (the Form
10-Q) and Item 1. Business, Item 1A. Risk Factors, Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations and our Consolidated Financial
Statements and the notes thereto included in our Annual Report on Form 10-K for the year ended
December 31, 2009 (our2009 Form 10-K).
 Overview
    Executive Summary
  Three Months EndedMarch 31,2010
    
    
    2009(In millions)Net income attributable to PHH Corporation
    
    $
    8
    
    
    $
    2Basic and diluted earnings per share attributable to PHH Corporation
    
    
    0.15
    
    
    
    0.04
 40




---



##### 




    
    Combined Mortgage Services Segments of $12 Million vs. $(5) Million:a favorable
change in the valuation adjustments related to MSRs resulting from a decline in
mortgage interest rates during the first quarter of 2009, a lower reduction in the
value of MSRs due to prepayments and our ongoing efforts to create a more scalable
mortgage production platform partially offset by lower mortgage production results from
decreasing margins on mortgage loans and lower volumes of more profitable first
mortgage retail originations and interest rate lock commitments (IRLCs) expected to
close.
 
    
    Mortgage Production Segment of $25 Million vs. $113 Million:lower margins
on mortgage loans, lower volumes of more profitable first mortgage retail
originations and IRLCs expected to close due to the decline in refinancing
closings partially offset by our ongoing efforts to create a more scalable
mortgage production platform.
    
    Mortgage Servicing Segment of $(13) Million vs. $(118) Million: a favorable
change in the valuation adjustments related to MSRs resulting from declines in
mortgage interest rates during the first quarter of 2009 and a lower reduction
in the value of MSRs due to prepayments partially offset by greater reduction
in the fair value of MSRs due to changes in credit-related adjustments.
 
    
    Fleet Management Services Segment of $8 Million vs. $7 Million:segment profit
during 2010 compared to 2009 was driven by improving leasing margins partially offset
by accelerated of costs associated with the execution of the transformation plan.
  Mortgage Services
 Regulatory Trends
   41




---



##### 



Mortgage Industry Trends
 Overall Trends
   Economics and Mortgage Market Analysis
  Mortgage Production Trends
 Economics and
 42




---



##### 



Mortgage Market Analysis
      March 31,2010(In millions)First mortgages:Conforming(1)
    
    $
    1,158Non-conforming
    
    
    21Alt-A(2)
    
    
    1Construction loans
    
    
    14Total first mortgages
    
    
    1,194Second lien
    
    
    12Scratch and Dent(3)
    
    
    45Other
    
    
    2Total
    
    $
    1,253
 
 (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. 43




---



##### 



Mortgage Servicing Trends
   Three MonthsEnded March 31,2010
    
    
    2009(In millions)Foreclosure-related reserves, January 1,
    
    $
    86
    
    
    $
    81Realized foreclosure losses
    
    
    (16
    )
    
    
    (15
    )Increase in foreclosure reserves
    
    
    26
    
    
    
    22Foreclosure-related reserves, March 31,
    
    $
    96
    
    
    $
    88
     Three MonthsEnded March 31,2010
    
    
    2009(In millions)Reinsurance-related reserves, January 1,
    
    $
    108
    
    
    $
    83Realized reinsurance losses
    
    
    (2
    )
    
    
    Increase in reinsurance reserves
    
    
    11
    
    
    
    14Reinsurance-related reserves, March 31,
    
    $
    117
    
    
    $
    97
  44




---



##### 



Fleet Management Services Segment
 Fleet Industry Trends
 Automotive Fleet
 Market and Credit Risk
  
 Results of OperationsFirst Quarter 2010 vs. First Quarter 2009
 Consolidated Results
  Three Months EndedMarch 31,2010
    
    
    2009
    
    
    Change(In millions)Net fee income
    
    $
    90
    
    
    $
    98
    
    
    $
    (8
    )Fleet lease income
    
    
    339
    
    
    
    364
    
    
    
    (25
    )Gain on mortgage loans, net
    
    
    105
    
    
    
    188
    
    
    
    (83
    )Mortgage net finance expense
    
    
    (20
    )
    
    
    (11
    )
    
    
    (9
    )Loan servicing income
    
    
    101
    
    
    
    100
    
    
    
    1Change in fair value of mortgage servicing rights
    
    
    (52
    )
    
    
    (163
    )
    
    
    111Other income
    
    
    14
    
    
    
    11
    
    
    
    3Net revenues
    
    
    577
    
    
    
    587
    
    
    
    (10
    )Depreciation on operating leases
    
    
    308
    
    
    
    325
    
    
    
    (17
    )Fleet interest expense
    
    
    23
    
    
    
    30
    
    
    
    (7
    )Total other expenses
    
    
    227
    
    
    
    227
    
    
    
    Total expenses
    
    
    558
    
    
    
    582
    
    
    
    (24
    )Income before income taxes
    
    
    19
    
    
    
    5
    
    
    
    14Provision for income taxes
    
    
    11
    
    
    
    
    
    
    
    11Net income
    
    
    8
    
    
    
    5
    
    
    
    3Less: net income attributable to noncontrolling interest
    
    
    
    
    
    
    3
    
    
    
    (3
    )Net income attributable to PHH Corporation
    
    $
    8
    
    
    $
    2
    
    
    $
    6
 45




---



##### 



Segment Results
   Mortgage Services
   46




---



##### 



Three Months EndedMarch 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change($ in millions)First mortgage closings (units)
    
    
    30,387
    
    
    
    36,325
    
    
    
    (5,938
    )
    
    
    (16
    )%Second-lien closings (units)
    
    
    2,232
    
    
    
    3,023
    
    
    
    (791
    )
    
    
    (26
    )%Total number of loans closed (units)
    
    
    32,619
    
    
    
    39,348
    
    
    
    (6,729
    )
    
    
    (17
    )%Average loan servicing portfolio
    
    $
    152,291
    
    
    $
    149,279
    
    
    $
    3,012
    
    
    
    2
    %
 Three Months EndedMarch 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Production-related expenses(1)
    
    $
    94
    
    
    $
    101
    
    
    $
    (7
    )
    
    
    (7
    )%Servicing-related expenses
    
    
    19
    
    
    
    17
    
    
    
    2
    
    
    
    12
    %Foreclosure costs
    
    
    23
    
    
    
    21
    
    
    
    2
    
    
    
    10
    %Other expenses
    
    
    40
    
    
    
    37
    
    
    
    3
    
    
    
    8
    %Total expenses
    
    $
    176
    
    
    $
    176
    
    
    $
    
    
    
    
    
 
 (1)
    
    Approximately 78% of production-related expenses for the first quarter of 2010
are scalable with origination volumes.  47




---



##### 



Three Months EndedMarch 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Mortgage fees
    
    $
    52
    
    
    $
    61
    
    
    $
    (9
    )
    
    
    (15
    )%Gain on mortgage loans, net
    
    
    105
    
    
    
    188
    
    
    
    (83
    )
    
    
    (44
    )%Mortgage interest income
    
    
    19
    
    
    
    25
    
    
    
    (6
    )
    
    
    (24
    )%Mortgage interest expense
    
    
    (38
    )
    
    
    (36
    )
    
    
    (2
    )
    
    
    (6
    )%Mortgage net finance expense
    
    
    (19
    )
    
    
    (11
    )
    
    
    (8
    )
    
    
    (73
    )%Loan servicing income
    
    
    101
    
    
    
    100
    
    
    
    1
    
    
    
    1
    %Change in fair value of mortgage servicing rights
    
    
    (52
    )
    
    
    (163
    )
    
    
    111
    
    
    
    68
    %Net loan servicing income (loss)
    
    
    49
    
    
    
    (63
    )
    
    
    112
    
    
    
    n/m
    (1)Other income (expense)
    
    
    1
    
    
    
    (1
    )
    
    
    2
    
    
    
    n/m
    (1)Net revenues
    
    
    188
    
    
    
    174
    
    
    
    14
    
    
    
    8
    %Salaries and related expenses
    
    
    86
    
    
    
    89
    
    
    
    (3
    )
    
    
    (3
    )%Occupancy and other office expenses
    
    
    11
    
    
    
    11
    
    
    
    
    
    
    
    Other depreciation and amortization
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    Other operating expenses
    
    
    76
    
    
    
    73
    
    
    
    3
    
    
    
    4
    %Total expenses
    
    
    176
    
    
    
    176
    
    
    
    
    
    
    
    Income (loss) before income taxes
    
    
    12
    
    
    
    (2
    )
    
    
    14
    
    
    
    n/m
    (1)Less: net income attributable to noncontrolling interest
    
    
    
    
    
    
    3
    
    
    
    (3
    )
    
    
    (100
    )%Combined Mortgage Services segments profit (loss)
    
    $
    12
    
    
    $
    (5
    )
    
    $
    17
    
    
    
    n/m
    (1)
 
 (1)
    
    n/m  Not meaningful. 48




---



##### 



Mortgage Production Segment
  Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(Dollars in millions, exceptaverage loan amount)Loans closed to be sold
    
    $
    5,673
    
    
    $
    7,307
    
    
    $
    (1,634
    )
    
    
    (22
    )%Fee-based closings
    
    
    2,152
    
    
    
    1,589
    
    
    
    563
    
    
    
    35
    %Total closings
    
    $
    7,825
    
    
    $
    8,896
    
    
    $
    (1,071
    )
    
    
    (12
    )%Purchase closings
    
    $
    3,418
    
    
    $
    2,586
    
    
    $
    832
    
    
    
    32
    %Refinance closings
    
    
    4,407
    
    
    
    6,310
    
    
    
    (1,903
    )
    
    
    (30
    )%Total closings
    
    $
    7,825
    
    
    $
    8,896
    
    
    $
    (1,071
    )
    
    
    (12
    )%Fixed rate
    
    $
    5,925
    
    
    $
    7,615
    
    
    $
    (1,690
    )
    
    
    (22
    )%Adjustable rate
    
    
    1,900
    
    
    
    1,281
    
    
    
    619
    
    
    
    48
    %Total closings
    
    $
    7,825
    
    
    $
    8,896
    
    
    $
    (1,071
    )
    
    
    (12
    )%First mortgage closings (units)
    
    
    30,387
    
    
    
    36,325
    
    
    
    (5,938
    )
    
    
    (16
    )%Second-lien closings (units)
    
    
    2,232
    
    
    
    3,023
    
    
    
    (791
    )
    
    
    (26
    )%Number of loans closed (units)
    
    
    32,619
    
    
    
    39,348
    
    
    
    (6,729
    )
    
    
    (17
    )%Retail closings (units)
    
    
    22,987
    
    
    
    32,782
    
    
    
    (9,795
    )
    
    
    (30
    )%Wholesale/correspondent closings (units)
    
    
    9,632
    
    
    
    6,566
    
    
    
    3,066
    
    
    
    47
    %Number of loans closed (units)
    
    
    32,619
    
    
    
    39,348
    
    
    
    (6,729
    )
    
    
    (17
    )%Average loan amount
    
    $
    239,899
    
    
    $
    226,082
    
    
    $
    13,817
    
    
    
    6
    %Loans sold
    
    $
    5,762
    
    
    $
    5,925
    
    
    $
    (163
    )
    
    
    (3
    )%Applications
    
    $
    12,199
    
    
    $
    15,724
    
    
    $
    (3,525
    )
    
    
    (22
    )%IRLCs expected to close
    
    $
    6,374
    
    
    $
    7,555
    
    
    $
    (1,181
    )
    
    
    (16
    )%
 Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Mortgage fees
    
    $
    52
    
    
    $
    61
    
    
    $
    (9
    )
    
    
    (15
    )%Gain on mortgage loans, net
    
    
    105
    
    
    
    188
    
    
    
    (83
    )
    
    
    (44
    )%Mortgage interest income
    
    
    16
    
    
    
    22
    
    
    
    (6
    )
    
    
    (27
    )%Mortgage interest expense
    
    
    (21
    )
    
    
    (24
    )
    
    
    3
    
    
    
    13
    %Mortgage net finance expense
    
    
    (5
    )
    
    
    (2
    )
    
    
    (3
    )
    
    
    (150
    )%Other income
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    (100
    )%Net revenues
    
    
    152
    
    
    
    248
    
    
    
    (96
    )
    
    
    (39
    )%Salaries and related expenses
    
    
    76
    
    
    
    79
    
    
    
    (3
    )
    
    
    (4
    )%Occupancy and other office expenses
    
    
    8
    
    
    
    8
    
    
    
    
    
    
    
    Other depreciation and amortization
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    Other operating expenses
    
    
    40
    
    
    
    42
    
    
    
    (2
    )
    
    
    (5
    )%Total expenses
    
    
    127
    
    
    
    132
    
    
    
    (5
    )
    
    
    (4
    )%Income before income taxes
    
    
    25
    
    
    
    116
    
    
    
    (91
    )
    
    
    (78
    )%Less: net income attributable to noncontrolling interest
    
    
    
    
    
    
    3
    
    
    
    (3
    )
    
    
    (100
    )%Segment profit
    
    $
    25
    
    
    $
    113
    
    
    $
    (88
    )
    
    
    (78
    )%
 49




---



##### 



Mortgage Production Statistics
    Mortgage Fees
   Gain on Mortgage Loans, Net
  50




---



##### 



Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Gain on loans
    
    $
    94
    
    
    $
    199
    
    
    $
    (105
    )
    
    
    (53
    )%Change in fair value of Scratch and Dent and
certain non-conforming mortgage loans
    
    
    (1
    )
    
    
    (10
    )
    
    
    9
    
    
    
    90
    %Economic hedge results
    
    
    12
    
    
    
    (1
    )
    
    
    13
    
    
    
    n/m
    (1)Total change in fair value of MLHS and related
derivatives
    
    
    11
    
    
    
    (11
    )
    
    
    22
    
    
    
    n/m
    (1)Gain on mortgage loans, net
    
    $
    105
    
    
    $
    188
    
    
    $
    (83
    )
    
    
    (44
    )%
 
 (1)
    
    n/m  Not meaningful.    Mortgage Net Finance Expense
  51




---



##### 



Salaries and Related Expenses
 .
 Mortgage Servicing Segment
  Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Average loan servicing portfolio
    
    $
    152,291
    
    
    $
    149,279
    
    
    $
    3,012
    
    
    
    2
    %
 Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Mortgage interest income
    
    $
    3
    
    
    $
    3
    
    
    $
    
    
    
    
    Mortgage interest expense
    
    
    (17
    )
    
    
    (12
    )
    
    
    (5
    )
    
    
    (42
    )%Mortgage net finance expense
    
    
    (14
    )
    
    
    (9
    )
    
    
    (5
    )
    
    
    (56
    )%Loan servicing income
    
    
    101
    
    
    
    100
    
    
    
    1
    
    
    
    1
    %Change in fair value of mortgage servicing rights
    
    
    (52
    )
    
    
    (163
    )
    
    
    111
    
    
    
    68
    %Net loan servicing income (loss)
    
    
    49
    
    
    
    (63
    )
    
    
    112
    
    
    
    n/m
    (1)Other income (expense)
    
    
    1
    
    
    
    (2
    )
    
    
    3
    
    
    
    n/m
    (1)Net revenues
    
    
    36
    
    
    
    (74
    )
    
    
    110
    
    
    
    n/m
    (1)Salaries and related expenses
    
    
    10
    
    
    
    10
    
    
    
    
    
    
    
    Occupancy and other office expenses
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    Other operating expenses
    
    
    36
    
    
    
    31
    
    
    
    5
    
    
    
    16
    %Total expenses
    
    
    49
    
    
    
    44
    
    
    
    5
    
    
    
    11
    %Segment loss
    
    $
    (13
    )
    
    $
    (118
    )
    
    $
    105
    
    
    
    89
    %
 
 (1)
    
    n/m  Not meaningful. Mortgage Net Finance Expense
  52




---



##### 



Loan Servicing Income
   Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Net service fee revenue
    
    $
    97
    
    
    $
    107
    
    
    $
    (10
    )
    
    
    (9
    )%Late fees and other ancillary servicing revenue
    
    
    15
    
    
    
    10
    
    
    
    5
    
    
    
    50
    %Curtailment interest paid to investors
    
    
    (7
    )
    
    
    (12
    )
    
    
    5
    
    
    
    42
    %Net reinsurance loss
    
    
    (4
    )
    
    
    (5
    )
    
    
    1
    
    
    
    20
    %Loan servicing income
    
    $
    101
    
    
    $
    100
    
    
    $
    1
    
    
    
    1
    %
  Change in Fair Value of Mortgage Servicing Rights
  53




---



##### 



Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Actual prepayments of the underlying mortgage loans
    
    $
    (34
    )
    
    $
    (65
    )
    
    $
    31
    
    
    
    48
    %Actual receipts of recurring cash flows
    
    
    (11
    )
    
    
    (14
    )
    
    
    3
    
    
    
    21
    %Credit-related fair value adjustments(1)
    
    
    (18
    )
    
    
    (13
    )
    
    
    (5
    )
    
    
    (38
    )%Market-related fair value adjustments(2)
    
    
    11
    
    
    
    (71
    )
    
    
    82
    
    
    
    n/m
    (3)Change in fair value of mortgage servicing rights
    
    $
    (52
    )
    
    $
    (163
    )
    
    $
    111
    
    
    
    68
    %
 
 (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.     Other Operating Expenses
  54




---



##### 



Fleet Management Services Segment
     Average for theThree MonthsEnded March 31,2010
    
    2009
    
    Change
    
    % Change(In thousands of units)Leased vehicles
    
    
    297
    
    
    
    327
    
    
    
    (30
    )
    
    
    (9
    )%Maintenance service cards
    
    
    272
    
    
    
    282
    
    
    
    (10
    )
    
    
    (4
    )%Fuel cards
    
    
    272
    
    
    
    286
    
    
    
    (14
    )
    
    
    (5
    )%Accident management vehicles
    
    
    288
    
    
    
    319
    
    
    
    (31
    )
    
    
    (10
    )%
 Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change
    
    
    % Change(In millions)Fleet management fees
    
    $
    38
    
    
    $
    37
    
    
    $
    1
    
    
    
    3
    %Fleet lease income
    
    
    339
    
    
    
    364
    
    
    
    (25
    )
    
    
    (7
    )%Other income
    
    
    13
    
    
    
    13
    
    
    
    
    
    
    
    Net revenues
    
    
    390
    
    
    
    414
    
    
    
    (24
    )
    
    
    (6
    )%Salaries and related expenses
    
    
    22
    
    
    
    22
    
    
    
    
    
    
    
    Occupancy and other office expenses
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    Depreciation on operating leases
    
    
    308
    
    
    
    325
    
    
    
    (17
    )
    
    
    (5)
    %Fleet interest expense
    
    
    24
    
    
    
    32
    
    
    
    (8
    )
    
    
    (25
    )%Other depreciation and amortization
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    Other operating expenses
    
    
    21
    
    
    
    21
    
    
    
    
    
    
    
    Total expenses
    
    
    382
    
    
    
    407
    
    
    
    (25
    )
    
    
    (6
    )%Segment profit
    
    $
    8
    
    
    $
    7
    
    
    $
    1
    
    
    
    14
    %
 Fleet Management Fees
  55




---



##### 



Fleet Lease Income
  Depreciation on Operating Leases
  Fleet Interest Expense
  Liquidity and Capital Resources
 General
    56




---



##### 



Cash Flows
  Three MonthsEnded March 31,2010
    
    
    2009
    
    
    Change(In millions)Cash provided by (used in):Operating activities
    
    $
    307
    
    
    $
    (527
    )
    
    $
    834Investing activities
    
    
    (236
    )
    
    
    (220
    )
    
    
    (16
    )Financing activities
    
    
    (82
    )
    
    
    754
    
    
    
    (836
    )Effect of changes in exchange rates on Cash and cash equivalents
    
    
    (2
    )
    
    
    6
    
    
    
    (8
    )Net (decrease) increase in Cash and cash equivalents
    
    $
    (13
    )
    
    $
    13
    
    
    $
    (26
    )
 Operating Activities
  Investing Activities
  Financing Activities
  Secondary Mortgage Market
  57




---



##### 



Indebtedness
  March 31,
    
    
    December 31,2010
    
    
    2009(In millions)Restricted cash
    
    $
    547
    
    
    $
    596Mortgage loans held for sale
    
    
    1,253
    
    
    
    1,218Net investment in fleet leases
    
    
    3,600
    
    
    
    3,610Mortgage servicing rights
    
    
    1,458
    
    
    
    1,413Assets under management programs
    
    $
    6,858
    
    
    $
    6,837
 58




---



##### 



March 31, 2010Assets 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
    
    $
    442
    
    
    $
    442
    
    
    
    
    
    
    
    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)
    
    
    25
    
    
    
    25
    
    
    
    
    
    
    
    2/17/2011Chesapeake Series 2009-3 Class A Term Notes
    
    
    50
    
    
    
    50
    
    
    
    
    
    
    
    10/20/2011Chesapeake Series 2009-4 Class A Term Notes
    
    
    250
    
    
    
    250
    
    
    
    
    
    
    
    2/18/2010FLRT Series 2010-1 Class A Notes(8)
    
    
    330
    
    
    
    330
    
    
    
    
    
    
    
    2/2011-11/2013Other
    
    
    44
    
    
    
    44
    
    
    
    
    
    
    
    6/2010-6/2016Total Vehicle Management Asset-Backed Debt
    
    
    3,019
    
    
    
    3,019
    
    
    
    2.0
    %(9)
    
    
    
    
    
    $
    22
    
    
    $
    246
    
    
    $
    
    
    
    $
    3,435RBS Repurchase Facility(10)
    
    
    562
    
    
    
    1,500
    
    
    
    3.0
    %
    
    
    6/24/2010
    
    
    
    
    
    
    
    
    
    
    
    593
    
    
    
    Fannie Mae Repurchase Facilities(11)
    
    
    391
    
    
    
    391
    
    
    
    1.0
    %
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    393
    
    
    
    Other (12)
    
    
    53
    
    
    
    83
    
    
    
    2.7
    %
    
    
    9/2010-10/2010
    
    
    
    59
    
    
    
    
    
    
    
    3
    
    
    
    Total Mortgage Warehouse Asset-Backed Debt
    
    
    1,006
    
    
    
    1,974
    
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    989
    
    
    
    Term Notes(13)
    
    
    438
    
    
    
    438
    
    
    
    6.5%-7.9
    %(14)
    
    
    4/2010-4/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Credit Facilities(15)
    
    
    230
    
    
    
    1,305
    
    
    
    1.0
    %(16)
    
    
    1/6/2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Convertible Notes due 2012(17)
    
    
    225
    
    
    
    225
    
    
    
    4.0
    %
    
    
    4/15/2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Convertible Notes due 2014(18)
    
    
    183
    
    
    
    183
    
    
    
    4.0
    %
    
    
    9/1/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Unsecured Debt
    
    
    1,076
    
    
    
    2,151
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mortgage Loan Securitization Debt Certificates, at Fair Value
    
    
    37
    
    
    
    37
    
    
    
    7.0
    %
    
    
    12/2027
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Debt
    
    $
    5,138
    
    
    $
    7,181
    
    
    
    
    
    
    
    
    
    
    $
    81
    
    
    $
    246
    
    
    $
    989
    
    
    $
    3,435
 
 (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 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) and Series 2010-1 Class A Notes have
revolving periods during which time the pro-rata share of lease cash flows pledged to
Chesapeake and FLRT, respectively, 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 the respective date, with the exception
of total vehicle management asset-backed debt, term notes, the 2014 Convertible Notes and 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 59




---



##### 



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 Funding
LLC (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 their 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 March 31, 2010 is net of an unamortized discount of $3 million and $4 million,
respectively. See Asset-Backed DebtVehicle Management Asset-Backed Debt below for
additional information.(8)
    
    On January 27, 2010, FLRT issued approximately $119 million of senior Class A-1 term
asset-backed notes which was comprised of two subclasses of senior term asset backed notes
(the Series 2010-1 Class A-1 Notes) and approximately $224 million of senior Class A-2 term
asset-backed notes under Series 2010-1 which was comprised of two subclasses of senior term
asset backed notes (the Series 2010-1 Class A-2 Notes and together with the Series 2010-1
Class A-1 Notes, collectively the Series 2010-1 Class A Notes) to finance a fixed pool of
eligible lease assets in Canada. Three of the four subclasses of Series 2010-1 Class A Notes
were denominated in Canadian dollars with the remaining subclass of Series 2010-1 Class A
Notes denominated in U.S. dollars. The Series 2010-1 Class A-1 notes and Class A-2 notes are
amortizing notes and have maturity dates of February 15, 2011 and November 15, 2013,
respectively.(9)
    
    Represents the weighted-average interest rate of our vehicle management asset-backed
debt arrangements as of March 31, 2010.(10)
    
    We maintain a variable-rate committed mortgage repurchase facility (the RBS
Repurchase Facility) with The Royal Bank of Scotland plc (RBS).(11)
    
    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 March 31, 2010.(12)
    
    Represents the variable interest rate on the majority of other mortgage warehouse
asset-backed debt as of March 31, 2010. The outstanding balance as of March 31, 2010 also
includes $3 million outstanding under another variable-rate mortgage warehouse facility that
bore interest at 4.0%.(13)
    
    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.(14)
    
    Represents the range of stated interest rates of the MTNs outstanding as of March
31, 2010. The effective rate of interest of our outstanding MTNs was 7.2% as of March 31,
2010.(15)
    
    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.(16)
    
    Represents the interest rate on the Amended Credit Facility as of March 31, 2010,
excluding per annum utilization and facility fees. The outstanding balance as of March 31,
2010 also includes $65 million outstanding under another variable-rate credit facility that
bore interest at 1.1%. See Unsecured DebtCredit Facilities below for additional
information.(17)
    
    On April 2, 2008, we 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 March 31, 2010 is net of an unamortized discount of $25 million. The effective rate of
interest of the 2012 Convertible Notes was 12.4% as of March 31, 2010, 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 three months ended March 31,
2010.(18)
    
    On September 29, 2009, we 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 March 31, 2010 is net of an unamortized discount of $67
million. The effective rate of interest of the 2014 Convertible Notes was 13.0% as of March
31, 2010, 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 three months ended March 31, 2010. Asset-Backed Debt
 Vehicle Management Asset-Backed Debt
  60




---



##### 



Mortgage Warehouse Asset-Backed Debt
   Unsecured Debt
  61




---



##### 



MoodysInvestors
    
    Standard
    
    FitchService
    
    & Poors
    
    RatingsSenior debt
    
    Ba2
    
    BB+
    
    BB+Short-term debt
    
    NP
    
    
    B
    
    
    
    B
    Credit Facilities
  62




---



##### 



Debt Maturities
  Asset-Backed
    
    
    Unsecured
    
    
    Total(In millions)Within one year
    
    $
    1,943
    
    
    $
    235
    
    
    $
    2,178Between one and two years
    
    
    1,026
    
    
    
    
    
    
    
    1,026Between two and three years
    
    
    646
    
    
    
    671
    
    
    
    1,317Between three and four years
    
    
    361
    
    
    
    
    
    
    
    361Between four and five years
    
    
    75
    
    
    
    250
    
    
    
    325Thereafter
    
    
    17
    
    
    
    8
    
    
    
    25$
    4,068
    
    
    $
    1,164
    
    
    $
    5,232
  Utilized
    
    AvailableCapacity(1)
    
    Capacity
    
    Capacity(In millions)Asset-Backed Funding ArrangementsVehicle management(2)
    
    $
    3,019
    
    
    $
    3,019
    
    
    $
    Mortgage warehouse(3)
    
    
    1,974
    
    
    
    1,280
    
    
    
    694Unsecured Committed Credit Facilities(4)
    
    
    1,305
    
    
    
    246
    
    
    
    1,059
 
 (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. The amount
outstanding under the Series 2006-2 notes was $442 million as of March 31, 2010. 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 $2.6 billion undrawn under the $3.0 billion Fannie Mae
Repurchase Facilities, as these facilities are uncommitted. Utilized capacity reflects $274
million of mortgage loans sold to RBS under the terms of the RBS Repurchase Facility. The
mortgage loans and related Debt are not included in our accompanying Condensed Consolidated
Balance Sheet as of March 31, 2010.(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 Condensed Consolidated
Balance Sheet. Debt Covenants
  63




---



##### 



Critical Accounting Policies
  Recently Issued Accounting Pronouncements
  Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
 Mortgage Servicing Rights
    64




---



##### 



Other Mortgage-Related Assets
  Indebtedness
  Consumer Credit Risk
 Loan Recourse
  Mortgage Loans in Foreclosure
  Real Estate Owned
  Mortgage Reinsurance
  65




---



##### 



Year of Origination2003andPrior
    
    2004
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Total(Dollars in millions)Unpaid principal balance
    
    $
    1,994
    
    
    $
    1,142
    
    
    $
    1,084
    
    
    $
    724
    
    
    $
    1,465
    
    
    $
    2,577
    
    
    $
    484
    
    
    $
    9,470Unpaid principal balance
as a percentage of
original unpaid principal
balance
    
    
    10
    %
    
    
    32
    %
    
    
    51
    %
    
    
    61
    %
    
    
    79
    %
    
    
    86
    %
    
    
    98
    %
    
    
    N/AMaximum potential exposure
to reinsurance losses
    
    $
    295
    
    
    $
    104
    
    
    $
    62
    
    
    $
    31
    
    
    $
    49
    
    
    $
    63
    
    
    $
    7
    
    
    $
    611Average FICO score
    
    
    696
    
    
    
    693
    
    
    
    696
    
    
    
    692
    
    
    
    701
    
    
    
    727
    
    
    
    759
    
    
    
    708Delinquencies(1)
    
    
    7.34
    %
    
    
    7.12
    %
    
    
    8.53
    %
    
    
    10.09
    %
    
    
    9.13
    %
    
    
    5.22
    %
    
    
    0.03
    %
    
    
    7.09
    %Foreclosures/
REO/
bankruptcies(2).
    
    
    4.48
    %
    
    
    7.72
    %
    
    
    10.73
    %
    
    
    14.04
    %
    
    
    11.48
    %
    
    
    2.38
    %
    
    
    0.00
    %
    
    
    6.72
    %
 
 (1)
    
    Represents delinquent mortgage loans for which payments are 60 days or more
outstanding as a percentage of the total unpaid principal balance.(2)
    
    Calculated as a percentage of the total unpaid principal balance.   Counterparty Credit Risk
  66




---



##### 



Fair Value Measurements
  Sensitivity Analysis
      67




---



##### 



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
    
    $
    32
    
    
    $
    23
    
    
    $
    13
    
    
    $
    (15
    )
    
    $
    (32
    )
    
    $
    (68
    )Interest rate lock commitments
    
    
    76
    
    
    
    58
    
    
    
    34
    
    
    
    (47
    )
    
    
    (100
    )
    
    
    (219
    )Forward loan sale commitments
    
    
    (137
    )
    
    
    (93
    )
    
    
    (50
    )
    
    
    59
    
    
    
    122
    
    
    
    254Total Mortgage loans held
for sale, interest rate
lock commitments and
related derivatives
    
    
    (29
    )
    
    
    (12
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (10
    )
    
    
    (33
    )Mortgage servicing rights
    
    
    (532
    )
    
    
    (214
    )
    
    
    (90
    )
    
    
    70
    
    
    
    125
    
    
    
    202Other assets
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Total mortgage assets
    
    
    (560
    )
    
    
    (225
    )
    
    
    (93
    )
    
    
    67
    
    
    
    114
    
    
    
    168Total vehicle assets
    
    
    19
    
    
    
    9
    
    
    
    5
    
    
    
    (5
    )
    
    
    (9
    )
    
    
    (18
    )Total liabilities
    
    
    (28
    )
    
    
    (14
    )
    
    
    (7
    )
    
    
    7
    
    
    
    14
    
    
    
    27Total, net
    
    $
    (569
    )
    
    $
    (230
    )
    
    $
    (95
    )
    
    $
    69
    
    
    $
    119
    
    
    $
    177
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  PART II  OTHER INFORMATION
 Item 1. Legal Proceedings
  Item 1A. Risk Factors
  68




---



##### 



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. (Removed and Reserved)
 Item 5. Other Information
  Item 6. Exhibits
  69




---



##### 



SIGNATURES
  PHH CORPORATIONBy:
    /s/ Jerome J. SelittoJerome J. SelittoPresident and Chief Executive Officer  By:
    /s/ Sandra E. BellSandra E. BellExecutive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)  70




---



##### 



EXHIBIT INDEX
 ExhibitNo.
    
    Description
    
    Incorporation by Reference3.1
    
    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.
 71




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference4.4.3
    
    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, 2007.4.4.4
    
    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 2006-2 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, 2006.4.5.2
    
    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.
 72




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference4.5.3
    
    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, 2007.4.5.4
    
    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, 2007.4.5.5
    
    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, 2009.4.5.6
    
    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.
 73




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference4.5.7
    
    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, 2009.4.8
    
    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.
    
    Incorporated by reference to Exhibit 4.8 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.4.8.1
    
    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.
    
    Incorporated by reference to Exhibit 4.8.1 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.4.8.2
    
    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 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.4.8.3
    
    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 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.4.8.4
    
    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 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.4.8.5
    
    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 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.4.8.6
    
    Fleet Leasing Receivables Trust Series 2010-1 Class
B Asset-Backed Note (included as part of Exhibit
4.8.1)
    
    Incorporated by reference to Exhibit 4.8.1 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.
 74




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.1
    
    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, 2007.10.1.2
    
    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.
 75




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.4.2
    
    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, 2006.10.4.7
    
    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.
 76




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.5.3
    
    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
    
    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, 2008.10.7.1
    
    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, 2008.10.7.2
    
    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, 2008.10.7.3
    
    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, 2008.10.7.4
    
    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.
 77




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.7.5
    
    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, 2008.10.7.6
    
    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, 2008.10.7.7
    
    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, 2008.10.7.8
    
    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, 2008.10.7.9
    
    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, 2008.10.7.10
    
    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, 2008.10.7.11
    
    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, 2008.10.7.12
    
    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, 2008.10.8
    
    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, 2008.10.8.1
    
    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, 2008.10.9
    
    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, 2009.10.10
    
    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.
 78




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.11
    
    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, 2009.10.11.1
    
    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, 2009.10.11.2
    
    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, 2009.10.11.3
    
    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, 2009.10.11.4
    
    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, 2009.10.11.5
    
    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, 2009.10.11.6
    
    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, 2009.10.11.7
    
    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, 2009.10.11.8
    
    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, 2009.10.11.9
    
    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, 2009.10.11.10
    
    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.
 79




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.11.11
    
    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, 2009.10.11.12
    
    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, 2009.10.11.13
    
    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, 2009.10.11.14
    
    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, 2009.10.11.15
    
    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, 2009.10.11.16
    
    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, 2009.10.11.17
    
    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, 2009.10.11.18
    
    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, 2009.10.12
    
    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, 2005.10.12.1
    
    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, 2005.10.12.2
    
    PHH Corporation Savings Restoration Plan.
    
    Incorporated by reference to Exhibit 10.12 to our Current
Report on Form 8-K filed on February 1, 2005.10.12.3
    
    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.
 80




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.12.4
    
    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, 2005.10.12.5
    
    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, 2005.10.12.6
    
    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, 2005.10.12.7
    
    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, 2005.10.12.8
    
    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, 2005.10.12.9
    
    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, 2005.10.12.10
    
    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, 2008.10.12.11
    
    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, 2009.10.12.12
    
    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, 2009.10.12.13
    
    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, 2009.10.12.14
    
    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.
 81




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference10.12.15
    
    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, 2009.10.12.16
    
    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, 2009.10.12.17
    
    PHH Corporation Management Incentive Plan.
    
    Incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed on April 6, 2010.10.12.18
    
    Form of PHH Corporation Management Incentive Plan
Award Notice.
    
    Incorporated by reference to Exhibit 10.2 to our Current
Report on Form 8-K filed on April 6, 2010.10.13
    
    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.
    
    Incorporated by reference to Exhibit 10.15 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.10.13.1
    
    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.
    
    Incorporated by reference to Exhibit 10.15.1 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.10.13.2
    
    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.
    
    Incorporated by reference to Exhibit 10.15.2 to our Annual
Report on Form 10-K for the year ended December 31, 2009
filed on March 1, 2010.31.1
    
    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.
 82




---



##### 



ExhibitNo.
    
    Description
    
    Incorporation by Reference32.2
    
    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. 83