PHH 8-K PHH Corporation Announces Third Quarter 2010 Results Year to Date Core Earnings* Exceed Full Year 2009 Core Earnings

Exhibit 99.1

PHH Corporation Announces Third Quarter 2010 Results
Year to Date Core Earnings* Exceed Full Year 2009 Core Earnings

• Third quarter core earnings were more than double first half 2010 core earnings results; third quarter GAAP results reflect substantial year-over-year improvement

• Strong core earnings driven by initiatives to profitably increase mortgage origination market share without compromising credit standards

• Fleet Management Services delivered strong results for the quarter as it regained momentum through a strategic focus on fee-based services

• Re-prioritized transformation initiatives and allocated resources to maximize capture of profitable mortgage origination volume

Mt. Laurel, NJ, November 2, 2010 (Business Wire) — PHH Corporation (NYSE: PHH) (“PHH” or the “Company”) today announced results for the three and nine months ended September 30, 2010. Mortgage production segment profit of $161 million offset a substantial portion of an unfavorable market-related change in the fair value of the Mortgage Servicing Rights (“MSR”) of $191 million, driving a third quarter 2010 GAAP loss before taxes of $2 million, Net loss attributable to PHH Corporation of $8 million and Loss per share of $0.14 (basic and diluted). A surge in third quarter application and interest rate lock commitments underpinned robust operating performance, reflected in third quarter 2010 core earnings (pre-tax)* of $180 million, core earnings (after-tax)* of $109 million, and core earnings per share* of $1.96.

Jerry Selitto, president and chief executive officer, commented, “Our strong performance is the result of our focus on driving shareholder value through sustainable earnings growth in each of our businesses. By increasing penetration of new and existing clients, we have profitably grown market share without compromising our high credit standards, and we have increased fee income in Fleet.

“Total mortgage closings were $12.7 billion for the quarter, up 26% over second quarter 2010, and our pipeline of interest rate lock commitments provides positive momentum going into the fourth quarter. With closings for the first nine months of the year at $30.6 billion and a robust pipeline of interest rate lock commitments, we are revising our guidance for production volume for the full year from $39 billion to approximately $45 billion.

“Although we re-prioritized our mortgage-related transformation projects to accommodate increased application volume, which delayed certain initiatives, we reported $83 million in annualized run rate savings through the third quarter and are on track to deliver $100 million in annualized run-rate savings by year-end.

“We undertook a comprehensive review of our foreclosure processes in light of problems experienced by other mortgage companies and, based on that review, we have not halted foreclosures in any states. We experienced a decrease in foreclosure provisions during the quarter as we began to see stability in repurchase trends. Based on the high credit quality of our servicing portfolio, our volume of foreclosure activity is small as compared to our largest competitors. As of September 30, 2010, we had less than 17,000 first mortgage loans in foreclosure representing less than 1.7% of the loans we service.

“Our liquidity position has been substantially strengthened over the course of the year. During the third quarter, we completed five new or amended facilities totaling $1.7 billion, to supplement the financing actions completed in the first half of 2010. Our goal of diversifying sources, extending maturities, and better matching future repayments with future cash flows is essentially complete. Our funding focus for next year will be to support the growth trajectory of our businesses.

“Given our strong operating performance this quarter, we expect full year 2010 core earnings per share in the range of $3.15 to $3.25.”

1

Consolidated Results

     Third Quarter — 2010

• Net revenues for the third quarter of 2010 of $572 million and Net revenues for the third quarter of 2009 of $507 million included unfavorable market-related changes in fair value of the MSRs of $(191) million and $(89) million, respectively.

• GAAP (Loss) income before income taxes was $(2) million for the third quarter of 2010 compared to $(80) million for the third quarter of 2009. Net (loss) income attributable to PHH Corporation was $(8) million, or $(0.14) per basic share, and $(52) million, or $(0.94) per basic share, for the third quarters of 2010 and 2009, respectively. GAAP results in both years were primarily impacted by an unfavorable change in the fair value of the MSRs resulting from a decline in mortgage interest rates during the respective periods.

• Core earnings (pre-tax) were $180 million and $36 million for the third quarters of 2010 and 2009, respectively. Core earnings (after-tax) were $109 million, or $1.96 per share, and $19 million, or $0.36 per share, for the third quarters of 2010 and 2009, respectively.

• Improved third quarter core earnings in comparison to 2009 were impacted by significantly higher interest rate lock commitments driven by higher volumes from our private label clients and our wholesale/correspondent channel, improving Fleet leasing margins, and the realization of selected transformation initiatives. The increase in other expenses was primarily driven by the impact of higher mortgage volumes.

Consolidated Results

     Nine Months — 2010

• Net revenues for the nine months ended September 30, 2010 of $1.5 billion and Net revenues for the nine months ended September 30, 2009 of $1.9 billion, included market-related changes in fair value of the MSRs of $(453) million and $15 million, respectively.

• GAAP (Loss) income before income taxes was $(198) million for the nine months ended September 30, 2010 compared to $111 million for the nine months ended September 30, 2009. Net (loss) income attributable to PHH Corporation was $(133) million, or $(2.39) per basic share, and $56 million, or $1.03 per basic share, for the nine months of 2010 and 2009, respectively. GAAP results were primarily impacted by an unfavorable market-related change in the fair value of the MSRs of $(453) million in the first nine months of 2010 versus a favorable market-related adjustment of $15 million in the first nine months of 2009.

• Core earnings (pre-tax) were $258 million and $150 million for the nine months ended September 30, 2010 and 2009, respectively. Core earnings (after-tax) were $150 million, or $2.70 per share, and $86 million, or $1.58 per share, for the nine months ended September 30, 2010 and 2009, respectively.

• Improved core earnings during 2010 in comparison to 2009 were impacted by significantly higher interest rate lock commitments driven by higher volumes from our private label clients and our wholesale/correspondent channel, improving Fleet leasing margins, and the realization of selected transformation initiatives. The increase in other expenses was primarily driven by the impact of higher mortgage volumes.

2

Segment Results — Third Quarter 2010

																		Third
																		Quarter
	Third Quarter 2010																	2009
										Fleet
	Mortgage			Mortgage			Combined			Management
	Production			Servicing			Mortgage Services			Services					Total PHH			Total PHH
	Segment			Segment			Segments			Segment		Other			Corporation			Corporation
	(In millions, unaudited)
Net fee income	$	75		$	—		$	75		$	38	$	—		$	113		$	106
Fleet lease income		—			—			—			342		—			342			363
Gain on mortgage loans		265			—			265			—		—			265			115
Mortgage net finance expense		(4	)		(13	)		(17	)		—		(1	)		(18	)		(16	)
Loan servicing revenues(1)		—			109			109			—		—			109			112
Net reinsurance loss		—			(4	)		(4	)		—		—			(4	)		(3	)
MSRs prepayments and recurring cash flows(2)		—			(57	)		(57	)		—		—			(57	)		(66	)
Other income		—			2			2			17		—			19			16
Core revenue*		336			37			373			397		(1	)		769			627
MSRs fair value adjustments:
Market-related(3)		—			(191	)		(191	)		—		—			(191	)		(89	)
Credit-related(4)		—			(6	)		(6	)		—		—			(6	)		(31	)
Net revenues		336			(160	)		176			397		(1	)		572			507
Depreciation on operating leases		—			—			—			307		—			307			315
Fleet interest expense		—			—			—			25		(1	)		24			21
Foreclosure-related charges		—			8			8			—		—			8			25
Other expenses		160			27			187			48		—			235			226
Total expenses		160			35			195			380		(1	)		574			587
Income (loss) before income taxes		176			(195	)		(19	)		17		—		$	(2	)	$	(80	)
Less: income attributable to noncontrolling interest		15			—			15			—		—
Segment profit (loss)	$	161		$	(195	)	$	(34	)	$	17	$	—

(1)	Loan servicing revenues do not include Net reinsurance loss.
(2)	Represents the reduction in the fair value of MSRs due to actual prepayments and the receipt of recurring cash flows.
(3)	Represents the Change in fair value of mortgage servicing rights due to changes in market inputs and assumptions used in the valuation model. The fair value of our MSRs is estimated based upon projections of expected future cash flows from our MSRs considering prepayment estimates, our historical prepayment rates, portfolio characteristics, interest rates based on interest rate yield curves, implied volatility and other economic factors.
(4)	Represents the Change in fair value of mortgage servicing rights primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

3

	Segment Profit (Loss) and Core Earnings (Loss) *
	Third Quarter 2010
									Fleet
	Mortgage		Mortgage			Combined			Management
	Production		Servicing			Mortgage Services			Services
	Segment		Segment			Segments			Segment
			(In millions, unaudited)
Segment profit (loss)	$	161	$	(195	)	$	(34	)	$	17
Certain MSRs fair value adjustments:
Market-related(1)		—		191			191			—
Credit-related(2)		—		6			6			—
Core earnings (pre tax)*	$	161	$	2		$	163		$	17

(1)	Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of MSRs primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

     The following summarizes the key highlights that drove our operating performance for our reportable segments during the third quarter of 2010 in comparison to the third quarter of 2009:

     Mortgage Production Segment

• During the third quarter of 2010, a greater mix of refinance closings as well as an $8.8 billion (160%) increase in interest rate lock commitments expected to close

• The trend of higher margins on mortgage loans continued from the second quarter 2010 into the third quarter of 2010, although margins have begun to soften in the fourth quarter

• Increase in the mix of wholesale/correspondent closings to 32% during the third quarter of 2010 from 16% during the same period in 2009, which represents the execution of our strategy to focus on this channel in 2010 and profitably grow market share without compromising credit standards.

Mortgage Servicing Segment

• Delinquency rates began to stabilize during the third quarter of 2010, which favorably impacted the credit-related change in value of our MSRs during the third quarter of 2010 compared to the same period in 2009

• Average loan servicing portfolio increased by $8 billion (5%) as additions to the Mortgage Servicing portfolio exceeded actual prepayments

• The fair value of MSRs declined by $191 million and $89 million in the third quarter of 2010 and 2009, respectively, due to changes in market-related inputs and assumptions. The change in the fair value of MSRs was negatively impacted in both periods by declines in mortgage interest rates.

• Foreclosure costs decreased to $8 million during the third quarter 2010, from $25 million during the same period in 2009 due to the impact of timing of loan repurchases and indemnifications and the related impact on loss provisions as we began to see stabilization in those trends during the quarter

Fleet Management Services Segment

• Continued improved leasing margins and focus on transformation initiatives positively impacted our results during the third quarter of 2010 compared to the same period in 2009

• Average leased units decreased 7% as existing clients have reduced fleets due to the current economic conditions and as we continue to realize the impact of non-renewals of lease arrangements in prior years

4

Segment Results — Nine Months 2010

																		Nine
	Nine Months 2010																	Months 2009
							Combined			Fleet
	Mortgage			Mortgage			Mortgage			Management
	Production			Servicing			Services			Services					Total PHH			Total PHH
	Segment			Segment			Segments			Segment		Other			Corporation			Corporation
	(In millions, unaudited)
Net fee income	$	193		$	—		$	193		$	116	$	—		$	309		$	328
Fleet lease income		—			—			—			1,030		—			1,030			1,087
Gain on mortgage loans		509			—			509			—		—			509			450
Mortgage net finance expense		(13	)		(42	)		(55	)		—		(2	)		(57	)		(39	)
Loan servicing revenues(1)		—			320			320			—		—			320			322
Net reinsurance loss		—			(17	)		(17	)		—		—			(17	)		(13	)
MSRs prepayments and recurring cash flows(2)		—			(148	)		(148	)		—		—			(148	)		(243	)
Other income		1			3			4			48		—			52			21
Core revenues *		690			116			806			1,194		(2	)		1,998			1,913
MSRs fair value adjustments:
Market-related(3)		—			(453	)		(453	)		—		—			(453	)		15
Credit-related(4)		—			(25	)		(25	)		—		—			(25	)		(66	)
Net revenues		690			(362	)		328			1,194		(2	)		1,520			1,862
Depreciation on operating leases		—			—			—			921		—			921			962
Fleet interest expense		—			—			—			74		(2	)		72			72
Foreclosure-related charges		—			51			51			—		—			51			59
Other expenses		433			79			512			161		1			674			658
Total expenses		433			130			563			1,156		(1	)		1,718			1,751
Income (loss) before income taxes		257			(492	)		(235	)		38		(1	)	$	(198	)	$	111
Less: income attributable to noncontrolling interest		22			—			22			—		—
Segment profit (loss)	$	235		$	(492	)	$	(257	)	$	38	$	(1	)

(1)	Loan servicing revenues do not include Net reinsurance loss.
(2)	Represents the reduction in the fair value of MSRs due to actual prepayments and the receipt of recurring cash flows.
(3)	Represents the Change in fair value of mortgage servicing rights due to changes in market inputs and assumptions used in the valuation model. The fair value of our MSRs is estimated based upon projections of expected future cash flows from our MSRs considering prepayment estimates, our historical prepayment rates, portfolio characteristics, interest rates based on interest rate yield curves, implied volatility and other economic factors.
(4)	Represents the Change in fair value of mortgage servicing rights primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

5

	Segment Profit (Loss) and Core Earnings (Loss) *
	Nine months 2010
	Mortgage		Mortgage			Combined			Fleet
	Production		Servicing			Mortgage Services			Management
	Segment		Segment			Segments			Services Segment		Other
Segment profit (loss)	$	235	$	(492	)	$	(257	)	$	38	$	(1	)
Certain MSRs fair value adjustments:
Market-related(1)		—		453			453			—		—
Credit-related(2).		—		25			25			—		—
Core earnings (loss) (pre tax)*	$	235	$	(14	)	$	221		$	38	$	(1	)

(1)	Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of MSRs primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

The following summarizes the key highlights that drove our operating performance for our reportable segments during the first nine months of 2010 in comparison to the first nine months of 2009:

     Mortgage Production Segment

• A $9.2 billion (46%) increase in interest rate lock commitments expected to close during the nine months ended September 30, 2010

• Pricing margins on mortgage loans during the nine months ended September 30, 2010 were higher than long term historical averages and were relatively consistent with the same period in 2009; however, there was a decrease in total margin during the nine months ended September 30, 2010 due to the lower value of initial capitalized MSRs resulting from continuing reductions in mortgage interest rates

• Increase the mix of wholesale/correspondent closings to 28% during the nine months ended September 30, 2010 from 14% during the same period in 2009, which represents the execution of our strategy to focus on this channel in 2010 and profitably grow market share without compromising credit quality.

     Mortgage Servicing Segment

• Delinquency rates have begun to stabilize during the third quarter of 2010, which has favorably impacted the credit-related change in value of our MSRs during the nine months ended September 30, 2010 compared to the same period in 2009

• Average loan servicing portfolio increased by $5.5 billion or 4% as additions to the Mortgage Servicing portfolio continued to exceed actual prepayments

• The fair value of our MSRs declined by $(453) million during the nine months ended September 30, 2010 compared to an increase of $15 million during the same period in 2009 due to changes in market-related inputs and assumptions and was impacted in both periods primarily by changes in mortgage interest rates

• Foreclosure costs decreased to $51 million during the nine months ended September 30, 2010, from $59 million during the same period in 2009 due to the impact of timing of loan repurchases and indemnifications and the related impact on loss provisions

     Fleet Management Services Segment

• Continued improved leasing margins and our focus on transformation initiatives positively impacted results during the nine months ended September 30, 2010 compared to the same period in 2009

• Average leased units decreased 8% as existing clients have reduced fleets due to the current economic conditions and as we continued to realize the impact of non-renewal of lease arrangements in previous years

6

     Capital and Liquidity

• As of September 30, 2010, we had $784 million of unused available capacity under our unsecured committed credit facilities as well as significant excess cash available to support working capital and other liquidity needs.

• As of September 30, 2010, we had mortgage warehouse and other asset-backed debt capacity of $2.6 billion, $2.2 billion of which was utilized.

• As of September 30, 2010, book value per share was $24.79. Book value per share is calculated by dividing total PHH Corporation stockholders’ equity by outstanding shares of common stock.

* Note Regarding Non-GAAP Financial Measures

     Core earnings (loss) (pre-tax and after-tax), core earnings (loss) per share attributable to PHH Corporation, and Core revenues, are financial measures that are not in accordance with GAAP. See Non-GAAP Reconciliations at the back of this release for a reconciliation of these measures to the most directly comparable GAAP financial measures.

     Core Earnings and Core Revenues measure the Company’s financial performance excluding certain unrealized changes in value of Mortgage Servicing Rights that are based upon projections of future voluntary and involuntary prepayments. The unrealized changes in value of our Mortgage Servicing rights for voluntary and involuntary prepayments are reflected as market-related and credit related fair value adjustments, respectively. Core Earnings and Core Revenues may also include other adjustments, as applicable based upon facts and circumstances, consistent with the intent of providing investors a means of evaluating our core operating performance.

     The Company believes that these Non-GAAP Financial Measures can be useful to investors because they provide a means by which investors can evaluate the Company’s underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business for a given period.

     The Company also believes that any meaningful analysis of the Company’s financial performance by investors requires an understanding of the factors that drive the underlying operating performance which can be obscured by significant unrealized changes in value of our Mortgage Servicing Rights in a given period that is included in Segment (loss) profit, (Loss) income before income taxes, Net (loss) income attributable to PHH Corporation and Basic (loss) earnings per share attributable to PHH Corporation in accordance with GAAP.

     Use of Core Earnings by Management

     The unrealized changes in the value of Mortgage Servicing Rights are based upon numerous assumptions, which include estimated changes in future prepayments that may or may not be actually realized in the future. The market-related fair value adjustments are based upon assumptions of future interest rates, the shape of the yield curve, volatility and other factors. The credit-related fair value adjustments are based upon projected levels of delinquencies and foreclosures that are assumed to remain at current period-end levels throughout the life of the asset for purposes of modeling the expected future cash flows of the Mortgage Servicing Rights. Value lost from actual voluntary and involuntary prepayments are recorded when the underlying loans actually prepay or when foreclosure proceedings are complete, and are included in core earnings based on the current value of the Mortgage Servicing Rights.

     The Company manages the business and has designed certain management incentives based upon the achievement of Core Earnings targets. In addition, the Company believes that it will likely replenish most, if not all, realized value lost from changes in value from actual prepayments through new loan originations and actively manages and monitors economic replenishment rates to measure our ability to continue to do so. Therefore, management does not believe the unrealized change in value of the Mortgage Servicing Rights is representative of the economic change in value of the business as a whole. The presentation of Core Earnings is designed to more closely align the timing of recognizing the actual value lost from prepayments in the Mortgage Servicing Segment with the associated value created through new originations in the Mortgage Production Segment.

     Limitations on the Use of Core Earnings and Core Revenues

     Since Core Earnings and Core Revenues measure the Company’s financial performance excluding certain unrealized changes in value of Mortgage Servicing Rights, they may not reflect the rate of value lost on subsequent actual payments or prepayments over time. As such, Core Earnings may tend to overstate operating results in a declining interest rate environment and understate operating results in a rising interest rate environment.

7

     Core earnings involves differences from Segment (loss) profit, (Loss) income before income taxes, Net (loss) income attributable to PHH Corporation and Basic (loss) earnings per share attributable to PHH Corporation computed in accordance with GAAP. Core earnings should be considered as supplementary to, and not as a substitute for, Segment (loss) profit, (Loss) income before income taxes, Net (loss) income attributable to PHH Corporation or Basic (loss) earnings per share attributable to PHH Corporation computed in accordance with GAAP as a measure of the Company’s financial performance.

Conference Call

The Company will conduct a conference call for investors on Tuesday, November 2, 2010, at 10:00 a.m., Eastern Daylight Time. Investors will be able to access the third quarter 2010 downloadable slide presentation that will accompany management’s remarks by visiting the Investor Relations page of the Company’s website atwww.phh.com prior to the conference call. Investors may also request copies via fax by calling the investor hotline at 1-856-917-7405.

Interested investors can access the conference call by dialing 1-800-533-7954 or 1-785-830-1924, using conference ID 9012324, ten minutes prior to the start time. The conference call will also be broadcast on the Company’s website atwww.phh.com. A replay will be available beginning shortly after the conclusion of the live call and ending on November 17, 2010, by dialing 1-888-203-1112 or 1-719-457-0820, using conference ID 9012324, or by logging on to the Company’s website.

About PHH Corporation

Headquartered in Mount Laurel, New Jersey, PHH Corporation is a leading outsource provider of mortgage and vehicle fleet management services. Its subsidiary, PHH Mortgage, is one of the top five retail originators of residential mortgages in the United States¹, and its subsidiary, PHH Arval, is a leading fleet management services provider in the United States and Canada. For additional information about the company and its subsidiaries please visit our website atwww.phh.com.¹ Inside Mortgage Finance, Copyright 2010

Forward-Looking Statements

Statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You should understand that these statements are not guarantees of performance or results and are preliminary in nature. Statements preceded by, followed by or that otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “projects”, “estimates”, “plans”, “may increase”, “may result”, “will result”, “may fluctuate” and similar expressions or future or conditional verbs such as “will”, “should”, “would”, “may” and “could” are generally forward-looking in nature and not historical facts.

You should consider the areas of risk described under the heading “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our periodic reports filed with the Securities and Exchange Commission under the Exchange Act, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, in connection with any forward-looking statements that may be made by us and our businesses generally. Except for our ongoing obligations to disclose material information under the federal securities laws, applicable stock exchange listing standards and unless otherwise required by law, we undertake no obligation to release publicly any updates or revisions to any forward-looking statements or to report the occurrence or non-occurrence of anticipated or unanticipated events.

Contact Information:

Investors:
Nancy R. Kyle
856-917-4268

Media:
Jonathan T. McGrain
856-917-0066

8

PHH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per share data)

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2010			2009			2010			2009
Revenues
Mortgage fees	$	75		$	69		$	193		$	216
Fleet management fees		38			37			116			112
Net fee income		113			106			309			328
Fleet lease income		342			363			1,030			1,087
Gain on mortgage loans, net		265			115			509			450
Mortgage interest income		29			20			69			70
Mortgage interest expense		(47	)		(36	)		(126	)		(109	)
Mortgage net finance expense		(18	)		(16	)		(57	)		(39	)
Loan servicing income		105			109			303			309
Change in fair value of mortgage servicing rights		(254	)		(186	)		(626	)		(294	)
Net loan servicing (loss) income		(149	)		(77	)		(323	)		15
Other income		19			16			52			21
Net revenues		572			507			1,520			1,862
Expenses
Salaries and related expenses		127			114			360			357
Occupancy and other office expenses		16			16			45			43
Depreciation on operating leases		307			315			921			962
Fleet interest expense		24			21			72			72
Other depreciation and amortization		6			7			17			20
Other operating expenses		94			114			303			297
Total expenses		574			587			1,718			1,751
(Loss) income before income taxes		(2	)		(80	)		(198	)		111
(Benefit from) provision for income taxes		(9	)		(32	)		(87	)		43
Net income (loss)		7			(48	)		(111	)		68
Less: net income attributable to noncontrolling interest		15			4			22			12
Net (loss) income attributable to PHH Corporation	$	(8	)	$	(52	)	$	(133	)	$	56
Basic (loss) earnings per share attributable to PHH Corporation	$	(0.14	)	$	(0.94	)	$	(2.39	)	$	1.03
Diluted (loss) earnings per share attributable to PHH Corporation	$	(0.14	)	$	(0.94	)	$	(2.39	)	$	1.02

9

PHH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)

	September 30,		December 31,
	2010		2009
ASSETS
Cash and cash equivalents	$	259	$	150
Restricted cash, cash equivalents and investments		509		596
Mortgage loans held for sale		2,703		1,218
Accounts receivable, net		551		469
Net investment in fleet leases		3,524		3,610
Mortgage servicing rights		1,083		1,413
Property, plant and equipment, net		44		49
Goodwill		25		25
Other assets(1)		764		593
Total assets	$	9,462	$	8,123
LIABILITIES AND EQUITY
Accounts payable and accrued expenses	$	557	$	495
Debt		6,579		5,160
Deferred income taxes		606		702
Other liabilities		315		262
Total liabilities		8,057		6,619
Commitments and contingencies		—		—
Total PHH Corporation stockholders’ equity		1,376		1,492
Noncontrolling interest		29		12
Total equity		1,405		1,504
Total liabilities and equity	$	9,462	$	8,123

(1) Other assets include intangible assets of $36 million and $38 million as of September 30, 2010 and December 31, 2009, respectively.

10

PHH CORPORATION AND SUBSIDIARIES
COMBINED MORTGAGE SERVICES SEGMENTS RESULTS
THIRD QUARTER 2010 VS. THIRD QUARTER 2009
(Unaudited)

	Three Months Ended
	September 30,
	2010			2009			Change			% Change
				(In millions)
Mortgage fees	$	75		$	69		$	6			9	%
Gain on mortgage loans, net		265			115			150			130	%
Mortgage interest income		29			20			9			45	%
Mortgage interest expense		(46	)		(36	)		(10	)		(28	)%
Mortgage net finance expense		(17	)		(16	)		(1	)		(6	)%
Loan servicing income		105			109			(4	)		(4	)%
Change in fair value of mortgage servicing rights		(254	)		(186	)		(68	)		(37	)%
Net loan servicing loss		(149	)		(77	)		(72	)		(94	)%
Other income		2			4			(2	)		(50	)%
Net revenues		176			95			81			85	%
Salaries and related expenses		104			89			15			17	%
Occupancy and other office expenses		11			12			(1	)		(8	)%
Other depreciation and amortization		2			4			(2	)		(50	)%
Other operating expenses		78			79			(1	)		(1	)%
Total expenses		195			184			11			6	%
Loss before income taxes		(19	)		(89	)		70			79	%
Less: net income attributable to noncontrolling interest		15			4			11			275	%
Combined Mortgage Services segments loss	$	(34	)	$	(93	)	$	59			63	%

11

PHH CORPORATION AND SUBSIDIARIES
COMBINED MORTGAGE SERVICES SEGMENTS RESULTS
NINE MONTHS ENDED SEPTEMBER 30, 2010 VS. NINE MONTHS ENDED SEPTEMBER 30, 2009
(Unaudited)

	Nine Months Ended
	September 30,
	2010			2009			Change			% Change
				(In millions)
Mortgage fees	$	193		$	216		$	(23	)		(11	)%
Gain on mortgage loans, net		509			450			59			13	%
Mortgage interest income		70			71			(1	)		(1	)%
Mortgage interest expense		(125	)		(112	)		(13	)		(12	)%
Mortgage net finance expense		(55	)		(41	)		(14	)		(34	)%
Loan servicing income		303			309			(6	)		(2	)%
Change in fair value of mortgage servicing rights		(626	)		(294	)		(332	)		(113	)%
Net loan servicing (loss) income		(323	)		15			(338	)		n/m	(1)
Other income (expense)		4			(15	)		19			n/m	(1)
Net revenues		328			625			(297	)		(48	)%
Salaries and related expenses		285			279			6			2	%
Occupancy and other office expenses		32			30			2			7	%
Other depreciation and amortization		8			11			(3	)		(27	)%
Other operating expenses		238			223			15			7	%
Total expenses		563			543			20			4	%
(Loss) income before income taxes		(235	)		82			(317	)		n/m	(1)
Less: net income attributable to noncontrolling interest		22			12			10			83	%
Combined Mortgage Services segments (loss) profit	$	(257	)	$	70		$	(327	)		n/m	(1)

⁽¹⁾ n/m — Not meaningful. 

12

PHH CORPORATION AND SUBSIDIARIES
MORTGAGE PRODUCTION SEGMENT RESULTS
THIRD QUARTER 2010 VS. THIRD QUARTER 2009
(Unaudited)

	Three Months
	Ended September 30,
	2010		2009		Change			% Change
	(Dollars in millions, except
	average loan amount)
Loans closed to be sold	$	9,976	$	6,630	$	3,346			50	%
Fee-based closings		2,702		2,383		319			13	%
Total closings	$	12,678	$	9,013	$	3,665			41	%
Purchase closings	$	5,361	$	4,481	$	880			20	%
Refinance closings		7,317		4,532		2,785			61	%
Total closings	$	12,678	$	9,013	$	3,665			41	%
Fixed rate	$	10,134	$	6,870	$	3,264			48	%
Adjustable rate		2,544		2,143		401			19	%
Total closings	$	12,678	$	9,013	$	3,665			41	%
Retail closings	$	8,567	$	7,534	$	1,033			14	%
Wholesale/correspondent closings		4,111		1,479		2,632			178	%
Total closings	$	12,678	$	9,013	$	3,665			41	%
First mortgage closings (units)		50,695		36,500		14,195			39	%
Second-lien closings (units)		2,222		2,661		(439	)		(16	)%
Number of loans closed (units)		52,917		39,161		13,756			35	%
Average loan amount	$	239,585	$	230,151	$	9,434			4	%
Loans sold	$	9,293	$	7,428	$	1,865			25	%
Applications	$	27,166	$	11,264	$	15,902			141	%
IRLCs expected to close	$	14,361	$	5,514	$	8,847			160	%

	Three Months
	Ended September 30,
	2010			2009			Change			% Change
				(In millions)
Mortgage fees	$	75		$	69		$	6			9	%
Gain on mortgage loans, net		265			115			150			130	%
Mortgage interest income		26			17			9			53	%
Mortgage interest expense		(30	)		(19	)		(11	)		(58	)%
Mortgage net finance expense		(4	)		(2	)		(2	)		(100	)%
Other income		—			3			(3	)		(100	)%
Net revenues		336			185			151			82	%
Salaries and related expenses		95			80			15			19	%
Occupancy and other office expenses		9			9			—			—
Other depreciation and amortization		2			3			(1	)		(33	)%
Other operating expenses		54			43			11			26	%
Total expenses		160			135			25			19	%
Income before income taxes		176			50			126			252	%
Less: net income attributable to noncontrolling interest		15			4			11			275	%
Segment profit	$	161		$	46		$	115			250	%

13

PHH CORPORATION AND SUBSIDIARIES
MORTGAGE PRODUCTION SEGMENT RESULTS
NINE MONTHS ENDED SEPTEMBER 30, 2010 VS. NINE MONTHS ENDED SEPTEMBER 30, 2009
(Unaudited)

	Nine Months
	Ended September 30,
	2010		2009		Change			% Change
	(Dollars in millions, except
	average loan amount)
Loans closed to be sold	$	23,309	$	22,917	$	392			2	%
Fee-based closings		7,251		5,955		1,296			22	%
Total closings	$	30,560	$	28,872	$	1,688			6	%
Purchase closings	$	14,954	$	10,937	$	4,017			37	%
Refinance closings		15,606		17,935		(2,329	)		(13	)%
Total closings	$	30,560	$	28,872	$	1,688			6	%
Fixed rate	$	24,016	$	23,809	$	207			1	%
Adjustable rate		6,544		5,063		1,481			29	%
Total closings	$	30,560	$	28,872	$	1,688			6	%
Retail closings	$	22,096	$	24,844	$	(2,748	)		(11	)%
Wholesale/correspondent closings		8,464		4,028		4,436			110	%
Total closings	$	30,560	$	28,872	$	1,688			6	%
First mortgage closings (units)		122,763		118,451		4,312			4	%
Second-lien closings (units)		6,716		8,278		(1,562	)		(19	)%
Number of loans closed (units)		129,479		126,729		2,750			2	%
Average loan amount	$	236,026	$	227,827	$	8,199			4	%
Loans sold	$	21,952	$	22,558	$	(606	)		(3	)%
Applications	$	55,323	$	41,807	$	13,516			32	%
IRLCs expected to close	$	29,160	$	19,999	$	9,161			46	%

	Nine Months
	Ended September 30,
	2010			2009			Change			% Change
				(In millions)
Mortgage fees	$	193		$	216		$	(23	)		(11	)%
Gain on mortgage loans, net		509			450			59			13	%
Mortgage interest income		60			61			(1	)		(2	)%
Mortgage interest expense		(73	)		(67	)		(6	)		(9	)%
Mortgage net finance expense		(13	)		(6	)		(7	)		(117	)%
Other income		1			5			(4	)		(80	)%
Net revenues		690			665			25			4	%
							��
Salaries and related expenses		256			251			5			2	%
Occupancy and other office expenses		25			23			2			9	%
Other depreciation and amortization		8			10			(2	)		(20	)%
Other operating expenses		144			128			16			13	%
Total expenses		433			412			21			5	%
Income before income taxes		257			253			4			2	%
Less: net income attributable to noncontrolling interest		22			12			10			83	%
Segment profit	$	235		$	241		$	(6	)		(2	)%

14

PHH CORPORATION AND SUBSIDIARIES
MORTGAGE SERVICING SEGMENT RESULTS
THIRD QUARTER 2010 VS. THIRD QUARTER 2009
(Unaudited)

	Three Months
	Ended September 30,
	2010		2009		Change		% Change
			(In millions)
Average loan servicing portfolio	$	157,479	$	149,526	$	7,953		5	%

	Three Months
	Ended September 30,
	2010			2009			Change			% Change
				(In millions)
Mortgage interest income	$	3		$	3		$	—			—
Mortgage interest expense		(16	)		(17	)		1			6	%
Mortgage net finance expense		(13	)		(14	)		1			7	%
Loan servicing income		105			109			(4	)		(4	)%
Change in fair value of mortgage servicing rights		(254	)		(186	)		(68	)		(37	)%
Net loan servicing loss		(149	)		(77	)		(72	)		(94	)%
Other income		2			1			1			100	%
Net revenues		(160	)		(90	)		(70	)		(78	)%
Salaries and related expenses		9			9			—			—
Occupancy and other office expenses		2			3			(1	)		(33	)%
Other depreciation and amortization		—			1			(1	)		(100	)%
Other operating expenses		24			36			(12	)		(33	)%
Total expenses		35			49			(14	)		(29	)%
Segment loss	$	(195	)	$	(139	)	$	(56	)		(40	)%

15

PHH CORPORATION AND SUBSIDIARIES
MORTGAGE SERVCING SEGMENT RESULTS
NINE MONTHS ENDED SEPTEMBER 30, 2010 VS. NINE MONTHS ENDED SEPTMEBER 30, 2009
(Unaudited)

	Nine Months
	Ended September 30,
	2010		2009		Change		% Change
			(In millions)
Average loan servicing portfolio	$	154,762	$	149,274	$	5,488		4	%

	Nine Months
	Ended September 30,
	2010			2009			Change			% Change
				(In millions)
Mortgage interest income	$	10		$	10		$	—			—
Mortgage interest expense		(52	)		(45	)		(7	)		(16	)%
Mortgage net finance expense		(42	)		(35	)		(7	)		(20	)%
Loan servicing income		303			309			(6	)		(2	)%
Change in fair value of mortgage servicing rights		(626	)		(294	)		(332	)		(113	)%
Net loan servicing (loss) income		(323	)		15			(338	)		n/m	(1)
Other income (expense)		3			(20	)		23			n/m	(1)
Net revenues		(362	)		(40	)		(322	)		(805	)%
Salaries and related expenses		29			28			1			4	%
Occupancy and other office expenses		7			7			—			—
Other depreciation and amortization		—			1			(1	)		(100	)%
Other operating expenses		94			95			(1	)		(1	)%
Total expenses		130			131			(1	)		(1	)%
Segment loss	$	(492	)	$	(171	)	$	(321	)		(188	)%

⁽¹⁾ n/m — Not meaningful

16

PHH CORPORATION AND SUBSIDIARIES
FLEET MANAGEMENT SERVICES SEGMENT RESULTS
THIRD QUARTER 2010 VS. THIRD QUARTER 2009
(Unaudited)

	Average for the
	Three Months
	Ended September 30,
	2010		2009		Change			% Change
	(In thousands of units)
Leased vehicles		289		310		(21	)		(7	)%
Maintenance service cards		286		273		13			5	%
Fuel cards		276		281		(5	)		(2	)%
Accident management vehicles		290		301		(11	)		(4	)%

	Three Months
	Ended September 30,
	2010		2009		Change			% Change
			(In millions)
Fleet management fees	$	38	$	37	$	1			3	%
Fleet lease income		342		363		(21	)		(6	)%
Other income		17		14		3			21	%
Net revenues		397		414		(17	)		(4	)%
Salaries and related expenses		19		21		(2	)		(10	)%
Occupancy and other office expenses		5		4		1			25	%
Depreciation on operating leases		307		315		(8	)		(3	)%
Fleet interest expense		25		22		3			14	%
Other depreciation and amortization		3		2		1			50	%
Other operating expenses		21		36		(15	)		(42	)%
Total expenses		380		400		(20	)		(5	)%
Segment profit	$	17	$	14	$	3			21	%

17

PHH CORPORATION AND SUBSIDIARIES
FLEET MANAGEMENT SERVICES SEGMENT RESULTS
NINE MONTHS ENDED SEPTEMBER 30, 2010 VS. NINE MONTHS ENDED SEPTEMBER 30, 2009
(Unaudited)

	Average for the
	Nine Months
	Ended September 30,
	2010		2009		Change			% Change
	(In thousands of units)
Leased vehicles		292		318		(26	)		(8	)%
Maintenance service cards		278		277		1			—
Fuel cards		274		284		(10	)		(4	)%
Accident management vehicles		289		311		(22	)		(7	)%

	Nine Months
	Ended September 30,
	2010		2009		Change			% Change
			(In millions)
Fleet management fees	$	116	$	112	$	4			4	%
Fleet lease income		1,030		1,087		(57	)		(5	)%
Other income		48		42		6			14	%
Net revenues		1,194		1,241		(47	)		(4	)%
Salaries and related expenses		60		63		(3	)		(5	)%
Occupancy and other office expenses		13		13		—			—
Depreciation on operating leases		921		962		(41	)		(4	)%
Fleet interest expense		74		76		(2	)		(3	)%
Other depreciation and amortization		8		8		—			—
Other operating expenses		80		80		—			—
Total expenses		1,156		1,202		(46	)		(4	)%
Segment profit	$	38	$	39	$	(1	)		(3	)%

18

PHH CORPORATION AND SUBSIDIARIES
COMPONENTS OF MORTGAGE LOANS HELD FOR SALE
(Unaudited)

	September 30,		December 31,
	2010		2009
	(In millions)
First mortgages:
Conforming(1)	$	2,521	$	1,106
Non-conforming		113		27
Construction loans		11		16
Total first mortgages		2,645		1,149
Second lien		12		24
Scratch and Dent(2)		42		43
Other		4		2
Total	$	2,703	$	1,218

(1)	Represents mortgage loans that conform to the standards of Fannie Mae, Freddie Mac or Ginnie Mae.
(2)	Represents mortgage loans with origination flaws or performance issues.

19

PHH CORPORATION AND SUBSIDIARIES
COMPONENTS OF GAIN ON MORTGAGE LOANS, NET
(Unaudited)

	Three Months
	Ended September 30,
	2010			2009			Change			% Change
	(In millions)
Gain on loans	$	259		$	80		$	179			224	%
Change in fair value of Scratch and Dent and certain non-conforming mortgage loans		(2	)		(3	)		1			33	%
Economic hedge results		8			38			(30	)		(79	)%
Total change in fair value of mortgage loans and related derivatives		6			35			(29	)		(83	)%
Gain on mortgage loans, net	$	265		$	115		$	150			130	%

	Nine Months
	Ended September 30,
	2010			2009			Change			% Change
	(In millions)
Gain on loans	$	493		$	427		$	66			15	%
Change in fair value of Scratch and Dent and certain non-conforming mortgage loans		(6	)		(17	)		11			65	%
Economic hedge results		22			40			(18	)		(45	)%
Total change in fair value of mortgage loans and related derivatives		16			23			(7	)		(30	)%
Gain on mortgage loans, net	$	509		$	450		$	59			13	%

20

PHH CORPORATION AND SUBSIDIARIES
MORTGAGE LOAN SERVICING PORTFOLIO
(Unaudited)

Portfolio Activity

	Nine Months
	Ended September 30,
	2010			2009
	(In millions)
Unpaid principal balance of loans included in the total servicing portfolio:
Balance, beginning of period	$	151,481		$	149,750
Additions		27,779			25,799
Payoffs, sales and curtailments		(19,849	)		(25,815	)
Balance, end of period	$	159,411		$	149,734

Portfolio Composition

	September 30,
	2010			2009
	(In millions)
Owned servicing portfolio	$	135,374		$	128,846
Subserviced portfolio		24,037			20,888
Total servicing portfolio	$	159,411		$	149,734
Fixed rate	$	111,047		$	99,672
Adjustable rate		48,364			50,062
Total servicing portfolio	$	159,411		$	149,734
Conventional loans	$	132,393		$	129,915
Government loans		20,179			13,125
Home equity lines of credit		6,839			6,694
Total servicing portfolio	$	159,411		$	149,734
Weighted-average interest rate		5.1	%		5.4	%

Portfolio Delinquency ⁽¹⁾

	September 30,
	2010						2009
	Number			Unpaid			Number			Unpaid
	of Loans			Balance			of Loans			Balance
30 days		2.42	%		2.11	%		2.57	%		2.28	%
60 days		0.66	%		0.63	%		0.82	%		0.79	%
90 or more days		1.31	%		1.37	%		1.39	%		1.47	%
Total delinquency		4.39	%		4.11	%		4.78	%		4.54	%
Foreclosure/real estate owned/bankruptcies(2)		3.00	%		3.02	%		2.65	%		2.72	%

(1)	Represents the loan servicing portfolio delinquencies as a percentage of the total number of loans and the total unpaid balance of the portfolio.
(2)	As of September 30, 2010 and 2009, there were 18,250 and 14,787 of loans in foreclosure with unpaid principal balances of $3.3 billion and $2.6 billion, respectively.

21

PHH CORPORATION AND SUBSIDIARIES
CHANGE IN FAIR VALUE OF MORTGAGE SERVICING RIGHTS
(Unaudited)

	Three Months
	Ended September 30,
	2010			2009			Change			% Change
				(In millions)
Actual prepayments of the underlying mortgage loans	$	(48	)	$	(50	)	$	2			4	%
Actual receipts of recurring cash flows		(9	)		(16	)		7			44	%
Credit-related fair value adjustments(1)		(6	)		(31	)		25			81	%
Market-related fair value adjustments(2)		(191	)		(89	)		(102	)		(115	)%
Change in fair value of mortgage servicing rights	$	(254	)	$	(186	)	$	(68	)		(37	)%

	Nine Months
	Ended September 30,
	2010			2009			Change			% Change
				(In millions)
Actual prepayments of the underlying mortgage loans	$	(117	)	$	(200	)	$	83			42	%
Actual receipts of recurring cash flows		(31	)		(43	)		12			28	%
Credit-related fair value adjustments(1)		(25	)		(66	)		41			62	%
Market-related fair value adjustments(2)		(453	)		15			(468	)		n/m	(3)
Change in fair value of mortgage servicing rights	$	(626	)	$	(294	)	$	(332	)		(113	)%

(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.

22

PHH CORPORATION AND SUBSIDIARIES
NET INVESTMENT IN FLEET LEASES DETAIL
(Unaudited)

	September 30,			December 31,
	2010			2009
Vehicles under open-end leases		96	%		95	%
Vehicles under closed-end leases		4	%		5	%
Vehicles under variable-rate leases		78	%		76	%
Vehicles under fixed-rate leases		22	%		24	%

Our Fleet Management Services segment’s historical net credit losses as a percentage of Net investment in fleet leases has averaged 2 basis points annually, and did not exceed 6 basis points annually, over the last ten fiscal years. During the nine months ended September 30, 2010, net credit losses as a percentage of Net investment in fleet leases were approximately 2 basis points for the period.

23

PHH CORPORATION AND SUBSIDIARIES
AVAILABLE FUNDING UNDER ASSET-BACKED DEBT
ARRANGEMENTS AND UNSECURED COMMITTED CREDIT FACILITIES
(Unaudited)

     As of September 30, 2010, available funding under the Company’s asset-backed debt arrangements and unsecured committed credit facilities consisted of:

			Utilized		Available
	Capacity(1)		Capacity		Capacity
			(In millions)
Asset-Backed Funding Arrangements
Vehicle management(2)	$	3,586	$	3,084	$	502
Mortgage warehouse and other(3)		2,610		2,247		363
Unsecured Committed Credit Facilities(4)		810		26		784

(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)	The Chesapeake 2009-1 Term Notes and the 2009-4 Term Notes have entered their respective amortization periods.
(3)	Capacity does not reflect $2.0 billion undrawn under the $3.0 billion uncommitted Fannie Mae repurchase facilities, and $129 million undrawn under other uncommitted repurchase facilities.
(4)	Utilized capacity reflects $16 million of letters of credit issued under the Amended Credit Facility, which are not included in Debt in the Condensed Consolidated Balance Sheet.

24

PHH CORPORATION AND SUBSIDIARIES
BOOK VALUE PER SHARE AND COMPONENTS OF PHH CORPORATION
STOCKHOLDERS’ EQUITY
(Unaudited)
(In millions)

	September 30,		December 31,
	2010		2009
Total PHH Corporation stockholders’ equity(1)	$	1,376	$	1,492
Book value per share	$	24.79	$	27.24

(1) Outstanding shares of common stock were 55.501 million and 54.775 million as of September 30, 2010 and December 31, 2009, respectively.

	September 30,
	2010
PHH Corporation Stockholders’ Equity(1):
Combined Mortgage Services Segments	$	895
Fleet Management Services Segment		428
Other		53
Total PHH Corporation stockholders’ equity	$	1,376

(1) The composition of Total PHH Corporation stockholders’ equity by business may be useful in determining return on stockholders’ equity by business; however, the reporting of equity by segment is not prescribed nor required by GAAP. As such, these amounts may be deemed non-GAAP financial measures under Regulation G. During the first quarter of 2010, our Mortgage and Fleet businesses paid dividends to PHH Corporation in order to effect a reallocation of capital between our businesses (“recapitalization”). Management evaluated several data sources, including rating agency leverage benchmarks, industry comparables and asset-backed securities market subordination levels to establish the revised equity levels in our businesses. The dividend payments impacted the balances under our intercompany funding arrangements, which are used to determine the allocation of our financing costs to our segments.

25

PHH CORPORATION AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(Unaudited)
(In millions, except per share data)

See “Note Regarding Non-GAAP Financial Measures” on page 7 of this press release for a description of the uses and limitations of these Non-GAAP Financial Measures.

Regulation G Reconciliation — Core Earnings

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2010			2009			2010			2009
Loss before income taxes — as reported	$	(2	)	$	(80	)	$	(198	)	$	111
Less: net income attributable to noncontrolling interest		15			4			22			12
		(17	)		(84	)		(220	)		99
Certain MSRs fair value adjustments:
Market-related(1)		191			89			453			(15	)
Credit-related(2)		6			31			25			66
Core earnings (pre-tax)	$	180		$	36		$	258		$	150
Net loss attributable to PHH Corporation — as reported	$	(8	)	$	(52	)	$	(133	)	$	56
Certain MSRs fair value adjustments:
Market-related, net of taxes(1)(3)		113			53			268			(9	)
Credit-related, net of taxes(2)(3)		4			18			15			39
Core earnings (after-tax)	$	109		$	19		$	150		$	86
Basic loss per share attributable to PHH Corporation — as reported	$	(0.14	)	$	(0.94	)	$	(2.39	)	$	1.03
Certain MSRs fair value adjustments:
Market-related, net of taxes(1)(4)		2.03			0.97			4.82			(0.17	)
Credit-related, net of taxes(2)(4)		0.07			0.33			0.27			0.72
Core earnings per share attributable to PHH Corporation(4)	$	1.96		$	0.36		$	2.70		$	1.58

(1)	Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of MSRs primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.
(3)	Incremental effective tax rate of 41% was applied to the MSRs fair value adjustments to arrive at the net of taxes amounts for the three months ended September 30, 2010 and 2009.
(4)	Basic weighted-average shares outstanding of 55.621 million and 54.744 million for the three months ended September 30, 2010 and 2009, respectively, and 55.404 and 54,543 for the nine months ended September 30, 2010 and 2009, respectively were used to calculate per share amounts.

26

PHH CORPORATION AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(Unaudited)
(In millions)

Regulation G Segment Reconciliation — Core Earnings

	Third Quarter 2010
	Mortgage		Mortgage			Combined			Fleet
	Production		Servicing			Mortgage Services			Management
	Segment		Segment			Segments			Services Segment
Segment profit (loss)	$	161	$	(195	)	$	(34	)	$	17
Certain MSRs fair value adjustments:
Market-related(1)		—		191			191			—
Credit-related(2)		—		6			6			—
Core earnings	$	161	$	2		$	163		$	17

(1)	Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of MSRs primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

Regulation G Segment Reconciliation — Core Earnings

	Nine Months 2010
	Mortgage		Mortgage			Combined			Fleet
	Production		Servicing			Mortgage Services			Management
	Segment		Segment			Segments			Services Segment		Other
Segment profit (loss)	$	235	$	(492	)	$	(257	)	$	38	$	(1	)
Certain MSRs fair value adjustments:
Market-related(1)		—		453			453			—		—
Credit-related(2)		—		25			25			—		—
Core earnings (loss)	$	235	$	(14	)	$	221		$	38	$	(1	)

(1)	Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of MSRs primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

27

PHH CORPORATION AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(Unaudited)
(In millions)

Regulation G Segment Reconciliation — Core Earnings

	Third Quarter 2009
	Mortgage		Mortgage			Combined			Fleet
	Production		Servicing			Mortgage Services			Management
	Segment		Segment			Segments			Services Segment		Other
Segment profit (loss)	$	46	$	(139	)	$	(93	)	$	14	$	(5	)
Certain MSRs fair value adjustments:
Market-related(1)		—		89			89			—		—
Credit-related(2)		—		31			31			—		—
Core earnings (loss)	$	46	$	(19	)	$	27		$	14	$	(5	)

(1)	Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of MSRs primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

Regulation G Segment Reconciliation — Core Earnings

	Nine Months 2009
	Mortgage		Mortgage			Combined			Fleet
	Production		Servicing			Mortgage Services			Management
	Segment		Segment			Segments			Services Segment		Other
Segment profit (loss)	$	241	$	(171	)	$	70		$	39	$	(10	)
Certain MSRs fair value adjustments:
Market-related(1)		—		(15	)		(15	)		—		—
Credit-related(2)		—		66			66			—		—
Core earnings (loss)	$	241	$	(120	)	$	121		$	39	$	(10	)

(1)	Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of MSRs primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

28

PHH CORPORATION AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(Unaudited)
(In millions)

Regulation G Segment Reconciliation — Core Revenue

															Third
	Third Quarter 2010														Quarter 2009
	Mortgage		Mortgage			Combined		Fleet
	Production		Servicing			Mortgage Services		Management					Total PHH		Total PHH
	Segment		Segment			Segments		Services Segment		Other			Corporation		Corporation
Net Revenue — as reported	$	336	$	(160	)	$	176	$	397	$	(1	)	$	572	$	507
Certain MSRs fair value adjustments:
Market-related(1)		—		191			191		—		—			191		89
Credit-related(2)		—		6			6		—		—			6		31
Core Revenue	$	336	$	37		$	373	$	397	$	(1	)	$	769	$	627

(1)	Represents the Change in fair value of mortgage servicing rights due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of mortgage servicing rights primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

Regulation G Segment Reconciliation — Core Revenue

															Nine Months
	Nine Months Ended September 30, 2010														2009
	Mortgage		Mortgage			Combined		Fleet
	Production		Servicing			Mortgage Services		Management					Total PHH		Total PHH
	Segment		Segment			Segments		Services Segment		Other			Corporation		Corporation
Net Revenue — as reported	$	690	$	(362	)	$	328	$	1,194	$	(2	)	$	1,520	$	1,862
Certain MSRs fair value adjustments:
Market-related(1)		—		453			453		—		—			453		(15	)
Credit-related(2)		—		25			25		—		—			25		66
Core Revenue	$	690	$	116		$	806	$	1,194	$	(2	)	$	1,998	$	1,913

(1)	Represents the Change in fair value of mortgage servicing rights due to changes in market inputs and assumptions used in the valuation model.
(2)	Represents the Change in fair value of mortgage servicing rights primarily due to the impact of changes in estimated portfolio delinquencies and foreclosures.

29