PHH Corporation Announces First Quarter 2008 Results

PHH to host conference call at 10:00 a.m. EDT on May 9, 2008
MT. LAUREL, N.J.--(Business Wire)--
PHH Corporation (NYSE: PHH) today announced results for the three
months ended March 31, 2008.

Net revenues for the three months ended March 31, 2008 were $642
million, an increase of 8% from Net revenues of $596 million for the
three months ended March 31, 2007.

Income before income taxes and minority interest of $44 million
for the three months ended March 31, 2008 increased by $11 million, or
33%, compared to $33 million for the three months ended March 31,
2007. Income before income taxes and minority interest for the three
months ended March 31, 2008 includes the receipt of a reverse
termination fee from Blackstone Capital Partners V L.P., net of merger
related expenses, of $42 million and a $30 million favorable impact
related to adopting fair value accounting pronouncements.

Net income for the three months ended March 31, 2008 was $30
million compared to $15 million for the three months ended March 31,
2007. Basic and Diluted earnings per share for the three months ended
March 31, 2008 was $0.55 compared to Basic and Diluted earnings per
share of $0.28 and $0.27, respectively, for the three months ended
March 31, 2007.

Mortgage Production Segment

Net revenues for the three months ended March 31, 2008 for the
mortgage production segment were $126 million compared to Net revenues
of $71 million for the three months ended March 31, 2007. Segment loss
for the three months ended March 31, 2008 was $8 million compared to
segment loss of $39 million for the three months ended March 31, 2007.

The decrease in segment loss for the three months ended March 31,
2008 in comparison to the same period in 2007 was primarily due to an
increase in margins on conforming mortgage loans and the benefit of
adopting new fair value accounting pronouncements, which were
partially offset by a decline in the valuation of adjustable-rate,
scratch and dent and jumbo mortgage loans and unfavorable hedge
results related to our mortgage loans held for sale and interest rate
lock commitments due to interest rate volatility.

Total closings for the three months ended March 31, 2008 increased
6% to $10.0 billion, compared to $9.4 billion for the same period in
2007. Of this increase, refinance closings rose 41% to $5.2 billion
from $3.7 billion in the three months ended March 31, 2007 while
purchase closings dropped 16% to $4.7 billion from $5.7 billion in the
three months ended March 31, 2007. Overall origination volumes were
positively impacted by an increase in refinancing activity due to
lower mortgage interest rates.

Highlights for the mortgage production segment included:

-- $10.0 billion of originations, a 6% increase, during the three
months ended March 31, 2008 compared to the three months ended
March 31, 2007

-- $7.1 billion of loans closed to be sold during the three
months ended March 31, 2008, approximately 90% of which were
conforming

-- A $15 million reduction in Total expenses during the three
months ended March 31, 2008 compared to the three months ended
March 31, 2007 resulting from our efforts to reduce costs

-- Five new private-label client signings during the three months
ended March 31, 2008, including: Comerica Bank, The Dime
Savings Bank of Williamsburgh, Union Center National Bank and
Bank of Sierra

Mortgage Servicing Segment

Net revenues for the three months ended March 31, 2008 for the
mortgage servicing segment were $19 million compared to Net revenues
of $75 million for the three months ended March 31, 2007. Segment loss
was $16 million for the three months ended March 31, 2008, compared to
segment profit of $55 million for the three months ended March 31,
2007.

The unfavorable change in segment (loss) profit of $71 million
during the three months ended March 31, 2008 compared to the three
months ended March 31, 2007 was due primarily to a higher net loss on
mortgage servicing rights (MSRs) risk management activities, decreased
loan servicing income due to sales of our MSRs during 2007 and an
increase in foreclosure losses and reserves associated with loans sold
with recourse.

Highlights for the mortgage servicing segment included:

-- Capitalized servicing rate of MSRs at 1.15% as of March 31,
2008

-- Delinquency rate as a percentage of the total unpaid principal
balance of the mortgage loan servicing portfolio at 2.28% as
of March 31, 2008, which the Company believes compares
favorably to the industry

Fleet Management Services Segment

Net revenues for the three months ended March 31, 2008 for the
fleet management services segment were $448 million compared to Net
revenues for the three months ended March 31, 2007 of $450 million.
Segment profit for the three months ended March 31, 2008 was $24
million compared to $21 million for the three months ended March 31,
2007.

The increase of $3 million in segment profit in the first quarter
of 2008 compared to the first quarter of 2007 was primarily due to a
decrease in corporate overhead costs.

During the three months ended March 31, 2008 compared to the three
months ended March 31, 2007, the average number of leased vehicles
remained at 340,000 units, fuel card units decreased 6% from 331,000
units to 310,000 units, maintenance service cards decreased 9% from
338,000 units to 308,000 units and accident management vehicle units
decreased 3% from 336,000 units to 327,000 units.

Highlights for the fleet management services segment included:

-- Entered into an agreement with J.J. Keller & Associates to
enhance our offerings by providing its comprehensive U.S.
Department of Transportation regulatory compliance and vehicle
legalization services suite to our heavy truck clients

-- Expanded our offering of PHH Onboard(R), our telematics
powered service, to our Canadian fleet management customers
resulting in a single information platform across the U.S. and
Canada

-- Introduced new productivity enhancements to PHH
InterActive(R), our industry-leading fleet management website,
including increased functionality of standard reports and an
enhanced news function

-- Entered into a strategic relationship with the Center for
Transportation Safety, a leading provider of risk management
and training solutions for drivers of vehicles of all sizes

Liquidity

During the three months ended March 31, 2008, we completed the
renewal of $2.9 billion of our funding arrangement for Chesapeake
Funding LLC, which provides committed funding for our fleet management
services segment through February 26, 2009. In addition, we executed a
$500 million mortgage repurchase facility which provides incremental
funding capacity for the Company's mortgage operations through
February 26, 2009.

On April 2, 2008, we issued $250 million of 4.0% convertible notes
due April 15, 2012. The net proceeds from the offering were $241
million. We used $28 million of the net proceeds of the offering to
pay the net cost of convertible note hedging and warrant transactions
that were entered into concurrently with the notes. We also used $213
million of the proceeds to reduce the borrowings under our amended and
restated competitive advance and revolving credit agreement which
provides incremental funding capacity for our mortgage operations. In
order to reduce the potential dilution of our common stock upon future
conversion of the convertible notes, we entered into convertible note
hedge and warrant transactions, which are expected to result in an
effective conversion price of $27.20 per share.

Investors should consult the Company's Form 10-Q for the quarter
ended March 31, 2008 when it is filed, for more information regarding
the Company's financing activities and the convertible notes.

Management Comments and Outlook

Terry Edwards, president and chief executive officer, stated,
"While we experienced higher refinance activity and overall production
volumes during the first quarter of 2008, the mortgage business
continued to be affected by, among other things, the widening of
credit spreads and the lack of liquidity for all mortgage products,
with the exception of 30-year conforming and 15-year fixed-rate
products. The decline in value of adjustable-rate, scratch and dent
and jumbo loans negatively impacted our mortgage production segment's
results for the first quarter of 2008 by $42 million, which was
partially offset by a $30 million benefit due to the adoption of fair
value accounting standards. Increased refinancing activity due to
lower interest rates was partially offset by the slow down in purchase
activity in the first quarter of 2008 compared to the first quarter of
2007.

"The loss in our servicing segment was attributable, in part, to
our reliance on the natural business hedge rather than hedging our
servicing portfolio with financial instruments. The natural business
hedge refers to the beneficial impact that a sustained decline in
interest rates has on borrower refinancing activity and margins.
Because the natural business hedge requires a sustained period of
lower interest rates, the benefit lags the initial interest rate
decline.

"The fleet management services segment performed well during the
first quarter; however, these results are not indicative of the
expected full year 2008 results since the increased financing costs
will not begin to fully impact us until the second quarter. We believe
that we are gaining momentum with potential new client signings
following the termination of the merger agreement with GE in January
2008.

"Although the financial services sector is expected to remain
challenging for the remainder of 2008, we believe that both businesses
are well positioned."

Executive Vice President and Chief Financial Officer

Today we also announced that we will begin a search for a new
executive vice president and chief financial officer to succeed Mr.
Clair M. Raubenstine. Mr. Raubenstine has successfully completed the
role for which he was appointed on February 23, 2006, namely, to
evaluate a number of accounting issues and ultimately guide us through
the restatement of our financial statements for certain periods prior
to December 31, 2005, to assist us in becoming and remaining a current
filer in our periodic reports filed with the U.S. Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and to implement an effective system of
internal control over financial reporting. Mr. Raubenstine will
continue to serve as our executive vice president and chief financial
officer until a successor is identified and an orderly transition is
effected.

Mr. Edwards stated, "Clair applied his vast experience and
boundless work ethic to accomplish the goals set by the Board. We
thank him for his great contribution to the Company and for his
continued commitment during this transition period."

2008 Annual Meeting of Stockholders

Our 2008 annual meeting of stockholders has been rescheduled for
Wednesday, June 11, 2008 at 10:00 a.m., eastern daylight time, in
Mount Laurel, New Jersey. Stockholders should consult the Notice of
the 2008 Annual Meeting and Proxy Statement which was filed with the
Securities and Exchange Commission on April 29, 2008 for further
information.

Conference Call

The Company will conduct a conference call for investors on
Friday, May 9, 2008 at 10:00 a.m., eastern daylight time. Interested
investors can access the conference call by dialing 1-877-795-3648 or
1-719-325-4783 ten minutes prior to the start time. The conference
call will also be broadcast on the Company's website at www.phh.com. A
replay will be available beginning approximately two hours after the
conclusion of the live call and ending at midnight on June 9, 2008 by
dialing 1-888-203-1112 or 1-719-457-0820, using passcode 6492105, 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 ten retail
originators of residential mortgages in the United States(1), 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 at www.phh.com.

(1) Inside Mortgage Finance, Copyright 2008

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act. These forward-looking statements
include the following: (i) our belief that our delinquency rate as a
percentage of the total balance of our unpaid mortgage loan servicing
portfolio compares favorably to the industry; (ii) our belief that PHH
InterActive(R) is an industry-leading fleet management website; (iii)
our belief that the Center for Transportation Safety is a leading
provider of risk management and training solutions for drivers of
vehicles of all sizes; (iv) our expectation as to the effective
conversion price for the convertible notes; (v) our expectation that
our fleet management services segment's results will not begin to
reflect the full impact of increased financing costs until the second
quarter of 2008; (vi) our belief that we are gaining momentum in our
fleet management services segment with potential new client signings
following the termination of the merger agreement with GE in January
2008; and (vii) our belief that we are well-positioned to operate in
what will likely remain a challenging year for the financial services
sector. These 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 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, we undertake no
obligation to release publicly any updates or revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events unless required by law.

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

Three Months
Ended March 31,
-----------------
2008 2007
-------- --------
Revenues
Mortgage fees $ 55 $ 30
Fleet management fees 42 39
-------- --------
Net fee income 97 69
-------- --------
Fleet lease income 384 390
-------- --------
Gain on mortgage loans, net 72 43
-------- --------
Mortgage interest income 53 91
Mortgage interest expense (42) (71)
-------- --------
Mortgage net finance income 11 20
-------- --------
Loan servicing income 112 130
-------- --------
Change in fair value of mortgage servicing rights (136) (72)
Net derivative gain (loss) related to mortgage
servicing rights 26 (5)
-------- --------
Valuation adjustments related to mortgage
servicing rights (110) (77)
-------- --------
Net loan servicing income 2 53
-------- --------
Other income 76 21
-------- --------
Net revenues 642 596
-------- --------
Expenses
Salaries and related expenses 116 87
Occupancy and other office expenses 19 18
Depreciation on operating leases 322 311
Fleet interest expense 44 49
Other depreciation and amortization 7 8
Other operating expenses 90 90
-------- --------
Total expenses 598 563
-------- --------
Income before income taxes and minority interest 44 33
Provision for income taxes 12 18
-------- --------
Income before minority interest 32 15
Minority interest in income of consolidated
entities, net of income taxes of $(2) 2 --
-------- --------
Net income $ 30 $ 15
======== ========
Basic earnings per share $ 0.55 $ 0.28
======== ========
Diluted earnings per share $ 0.55 $ 0.27
======== ========
Weighted-average common shares outstanding:
Basic 54.193 53.755
======== ========
Diluted 54.530 54.678
======== ========
*T

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

March December
31, 31,
2008 2007
------ --------
ASSETS
Cash and cash equivalents $ 117 $ 149
Restricted cash 566 579
Mortgage loans held for sale, net -- 1,564
Mortgage loans held for sale (at fair value) 1,853 --
Accounts receivable, net 528 686
Net investment in fleet leases 4,292 4,224
Mortgage servicing rights 1,466 1,502
Investment securities 39 34
Property, plant and equipment, net 60 61
Goodwill 86 86
Other assets(1) 606 472
------ --------
Total assets $9,613 $9,357
====== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 477 $ 533
Debt 6,477 6,279
Deferred income taxes 681 697
Other liabilities 393 287
------ --------
Total liabilities 8,028 7,796
------ --------
Commitments and contingencies -- --
Minority interest 36 32
Total stockholders' equity(2) 1,549 1,529
------ --------
Total liabilities and stockholders' equity $9,613 $9,357
====== ========
*T

(1) Other assets include intangible assets of $42 million and $43
million as of March 31, 2008 and December 31, 2007, respectively.

(2) Outstanding shares of common stock were 54.137 million and
54.079 million as of March 31, 2008 and December 31, 2007,
respectively.

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PHH CORPORATION AND SUBSIDIARIES
CONSOLIDATING SEGMENT RESULTS
(Unaudited)

Segment (Loss)
Net Revenues Profit(1)
---------------- ------------------
Three
Months Three
Ended Months
March Ended March
31, 31,
--------- -----------
2008 2007 Change 2008 2007 Change
---- ---- ------ ----- ----- ------
(In millions)
Mortgage Production segment $126 $ 71 $ 55 $ (8) $(39) $ 31
Mortgage Servicing segment 19 75 (56) (16) 55 (71)
---- ---- ------ ----- ----- ------
Total Mortgage Services 145 146 (1) (24) 16 (40)
Fleet Management Services segment 448 450 (2) 24 21 3
---- ---- ------ ----- ----- ------
Total reportable segments 593 596 (3) -- 37 (37)
Other(2) 49 -- 49 42 (4) 46
---- ---- ------ ----- ----- ------
Total Company $642 $596 $ 46 $ 42 $ 33 $ 9
==== ==== ====== ===== ===== ======
*T

(1) The following is a reconciliation of Income before income
taxes and minority interest to segment profit:

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*T
Three Months
Ended March
31,
------------
2008 2007
------ -----
(In
millions)
Income before income taxes and minority interest $ 44 $ 33
Minority interest in income of consolidated entities, net
of income taxes 2 --
------ -----
Segment profit $ 42 $ 33
====== =====
*T

(2) Net revenues reported under the heading Other for the three
months ended March 31, 2008 represent amounts not allocated to our
reportable segments, primarily related to the terminated Merger
Agreement, and intersegment eliminations. Segment profit of $42
million reported under the heading Other for the three months ended
March 31, 2008 represents income related to the terminated Merger
Agreement. Segment loss reported under the heading Other for the three
months ended March 31, 2007 represents expenses related to the
terminated Merger Agreement.

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PHH CORPORATION AND SUBSIDIARIES
MORTGAGE PRODUCTION SEGMENT RESULTS
FIRST QUARTER 2008 VS. FIRST QUARTER 2007
(Unaudited)

Three Months
Ended March 31,
-------------------
2008 2007 Change % Change
--------- --------- -------- ----------
(Dollars in millions, except
average loan amount)
Loans closed to be sold $ 7,100 $ 7,004 $ 96 1%
Fee-based closings 2,850 2,346 504 21%
--------- --------- -------- ----------
Total closings $ 9,950 $ 9,350 $ 600 6%
========= ========= ======== ==========
Purchase closings $ 4,749 $ 5,660 $ (911) (16)%
Refinance closings 5,201 3,690 1,511 41%
--------- --------- -------- ----------
Total closings $ 9,950 $ 9,350 $ 600 6%
========= ========= ======== ==========
Fixed rate $ 6,193 $ 5,943 $ 250 4%
Adjustable rate 3,757 3,407 350 10%
--------- --------- -------- ----------
Total closings $ 9,950 $ 9,350 $ 600 6%
========= ========= ======== ==========
Number of loans closed (units) 42,123 44,023 (1,900) (4)%
========= ========= ======== ==========
Average loan amount $236,225 $212,385 $23,840 11%
========= ========= ======== ==========
Loans sold $ 6,420 $ 6,839 $ (419) (6)%
========= ========= ======== ==========

Three Months
Ended March 31,
-------------------
2008 2007 Change % Change
--------- --------- -------- ----------
(In millions)
Mortgage fees $ 55 $ 30 $ 25 83%
--------- --------- -------- ----------
Gain on mortgage loans, net 72 43 29 67%
--------- --------- -------- ----------
Mortgage interest income 25 48 (23) (48)%
Mortgage interest expense (26) (50) 24 48%
--------- --------- -------- ----------
Mortgage net finance expense (1) (2) 1 50%
--------- --------- -------- ----------
Net revenues 126 71 55 77%
--------- --------- -------- ----------
Salaries and related expenses 78 52 26 50%
Occupancy and other office
expenses 11 11 -- --
Other depreciation and
amortization 4 5 (1) (20)%
Other operating expenses 39 42 (3) (7)%
--------- --------- -------- ----------
Total expenses 132 110 22 20%
--------- --------- -------- ----------
Loss before income taxes (6) (39) 33 85%
Minority interest in income of
consolidated entities,
net of income taxes 2 -- 2 n/m(1)
--------- --------- -------- ----------
Segment loss $ (8) $ (39) $ 31 79%
========= ========= ======== ==========

(1) n/m -- Not meaningful.
*T

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PHH CORPORATION AND SUBSIDIARIES
MORTGAGE SERVICING SEGMENT RESULTS
FIRST QUARTER 2008 VS. FIRST QUARTER 2007
(Unaudited)

Three Months
Ended March 31,
-------------------
2008 2007 Change % Change
--------- --------- -------- ----------
(In millions)
Average loan servicing
portfolio $160,051 $161,477 $(1,426) (1)%
========= ========= ======== ==========

Three Months
Ended March 31,
-------------------
2008 2007 Change % Change
--------- --------- -------- ----------
(In millions)
Mortgage interest income $ 28 $ 43 $ (15) (35)%
Mortgage interest expense (18) (21) 3 14%
--------- --------- -------- ----------
Mortgage net finance income 10 22 (12) (55)%
--------- --------- -------- ----------
Loan servicing income 112 130 (18) (14)%
--------- --------- -------- ----------
Change in fair value of
mortgage servicing rights (136) (72) (64) (89)%
Net derivative gain (loss)
related to mortgage servicing
rights 26 (5) 31 n/m(1)
--------- --------- -------- ----------
Valuation adjustments
related to mortgage
servicing rights (110) (77) (33) (43)%
--------- --------- -------- ----------
Net loan servicing income 2 53 (51) (96)%
--------- --------- -------- ----------
Other income 7 -- 7 n/m(1)
--------- --------- -------- ----------
Net revenues 19 75 (56) (75)%
--------- --------- -------- ----------
Salaries and related expenses 8 8 -- --
Occupancy and other office
expenses 3 2 1 50%
Other operating expenses 24 10 14 140%
--------- --------- -------- ----------
Total expenses 35 20 15 75%
--------- --------- -------- ----------
Segment (loss) profit $ (16) $ 55 $ (71) n/m(1)
========= ========= ======== ==========

(1) n/m -- Not meaningful.
*T

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PHH CORPORATION AND SUBSIDIARIES
FLEET MANAGEMENT SERVICES SEGMENT RESULTS
FIRST QUARTER 2008 VS. FIRST QUARTER 2007
(Unaudited)

Average
for the
Three
Months
Ended
March
31,
---------
2008 2007 Change % Change
---- ---- ------ --------
(In thousands of
units)
Leased vehicles 340 340 -- --
Maintenance service cards 308 338 (30) (9)%
Fuel cards 310 331 (21) (6)%
Accident management vehicles 327 336 (9) (3)%

Three
Months
Ended
March
31,
---------
2008 2007 Change % Change
---- ---- ------ --------
(In millions)
Fleet management fees $ 42 $ 39 $ 3 8%
Fleet lease income 384 390 (6) (2)%
Other income 22 21 1 5%
---- ---- ------ --------
Net revenues 448 450 (2) --
---- ---- ------ --------
Salaries and related expenses 27 24 3 13%
Occupancy and other office expenses 5 5 -- --
Depreciation on operating leases 322 311 11 4%
Fleet interest expense 45 49 (4) (8)%
Other depreciation and amortization 3 3 -- --
Other operating expenses 22 37 (15) (41)%
---- ---- ------ --------
Total expenses 424 429 (5) (1)%
---- ---- ------ --------
Segment profit $ 24 $ 21 $ 3 14%
==== ==== ====== ========
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PHH CORPORATION AND SUBSIDIARIES
COMPONENTS OF MORTGAGE LOANS HELD FOR SALE
(Unaudited)

March 31,
2008
----------
(In
millions)
First mortgages:
Conforming(1) $1,224
Non-conforming 341
Alt-A(2) 23
Construction loans 56
----------
Total first mortgages 1,644
----------
Second lien 42
Scratch and Dent(3) 39
Other(4) 128
----------
Total Mortgage loans held for sale (at fair value) $1,853
==========
*T

(1) Represents mortgages that conform to the standards of Fannie
Mae, Freddie Mac or Ginnie Mae (collectively, "Government Sponsored
Enterprises" or "GSEs").

(2) Represents mortgages that are made to borrowers with prime
credit histories, but do not meet the documentation requirements of a
GSE loan.

(3) Represents mortgages with origination flaws or performance
issues.

(4) Represents primarily first mortgages to be sold under best
efforts commitments.

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PHH CORPORATION AND SUBSIDIARIES
ECONOMIC HEDGE RESULTS RELATED TO MLHS AND IRLCS
(Unaudited)

Three
Months
Ended
March
31,
----------
2008 2007 Change % Change
---------- ------ --------
(In millions)
Decline in valuation of ARMs $(19) $-- $(19) n/m(1)
Decline in valuation of Scratch and Dent
loans (16) -- (16) n/m(1)
Decline in valuation of jumbo loans (7) -- (7) n/m(1)
Other economic hedge results (26) (6) (20) (333)%
---------- ------ --------
Total economic hedge results $(68) $(6) $(62) n/m(1)
========== ====== ========

(1) n/m -- Not meaningful.
*T

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PHH CORPORATION AND SUBSIDIARIES
MORTGAGE LOAN SERVICING PORTFOLIO
(Unaudited)
Portfolio Activity

Three Months
Ended March 31,
-------------------
2008 2007
--------- ---------
(In millions)
Balance, beginning of period $159,183 $160,222
Additions 8,427 9,557
Payoffs and curtailments (6,374) (7,909)
--------- ---------
Balance, end of period (1) $161,236 $161,870
========= =========

Portfolio Composition
March 31,
-------------------
2008 2007
--------- ---------
(In millions)
Owned servicing portfolio $131,739 $153,431
Subserviced portfolio(1) 29,497 8,439
--------- ---------
Total servicing portfolio $161,236 $161,870
========= =========
Fixed rate $106,764 $103,844
Adjustable rate 54,472 58,026
--------- ---------
Total servicing portfolio $161,236 $161,870
========= =========
Conventional loans $148,209 $150,385
Government loans 8,710 7,565
Home equity lines of credit 4,317 3,920
--------- ---------
Total servicing portfolio $161,236 $161,870
========= =========
Weighted-average interest rate 5.9% 6.1%
========= =========
*T

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Portfolio Delinquency(2)

March 31,
------------------------------
2008 2007
--------------- --------------
Number Number
of Unpaid of Unpaid
Loans Balance Loans Balance
------ -------- ------ -------
30 days 1.78% 1.57% 1.73% 1.49%
60 days 0.42% 0.39% 0.33% 0.27%
90 or more days 0.38% 0.32% 0.33% 0.27%
------ -------- ------ -------
Total delinquency 2.58% 2.28% 2.39% 2.03%
====== ======== ====== =======
Foreclosure/real estate
owned/bankruptcies 1.26% 1.16% 0.78% 0.60%
====== ======== ====== =======
*T

(1) During the year ended December 31, 2007, the Company sold
MSRs; as of March 31, 2008, MSRs associated with $18.6 billion of the
unpaid principal balance of underlying mortgage loans are being
subserviced by the Company until the MSRs are transferred from the
Company's systems to the purchaser's systems, which is expected to
occur in the second quarter of 2008. These loans are included in the
Company's mortgage loan servicing portfolio balance as of March 31,
2008.

(2) Represents the loan servicing portfolio delinquencies as a
percentage of the total number of loans and the total unpaid balance
of the portfolio.

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PHH CORPORATION AND SUBSIDIARIES
NET LOSS ON MORTGAGE SERVICING RIGHTS RISK MANAGEMENT ACTIVITIES
(Unaudited)

Three Months
Ended March
31,
-------------
2008 2007
------ ------
(In millions)
Net derivative gain (loss) related to mortgage servicing
rights $ 26 $ (5)
Change in fair value of mortgage servicing rights due to
changes in market inputs or assumptions used in the
valuation model (76) 3
------ ------
Net loss on MSRs risk management activities $ (50) $ (2)
====== ======
*T

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

As of March 31, 2008, 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 $3,909 $3,479 $430
Mortgage warehouse 2,384 1,472 912
Unsecured Committed Credit
Facilities (2) 1,301 1,080 221
*T

(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 availability of
asset eligibility requirements under the respective agreements.

(2) Available capacity reflects a reduction in availability due to
an allocation against the facilities of $6 million which fully
supports the outstanding unsecured commercial paper issued by the
Company as of March 31, 2008. Under the Company's policy, all of the
outstanding unsecured commercial paper is supported by available
capacity under its unsecured committed credit facilities. In addition,
utilized capacity reflects $8 million of letters of credit issued
under the Amended Credit Facility.

PHH Corporation
Investors:
Nancy R. Kyle, 856-917-4268
or
Media:
Karen K. McCallson, 856-917-8679

Copyright Business Wire 2008