PHH Corporation Announces Fourth Quarter and Year End 2007 Results

PHH to host conference call beginning at 10:00 a.m. on February 29

Company also sets date of 2008 Annual Meeting of Stockholders
MT. LAUREL, N.J.--(Business Wire)--
PHH Corporation (NYSE: PHH) today announced results for the three
months and year ended December 31, 2007.

Net revenues for the three months ended December 31, 2007 were
$550 million, a decrease of 11% from Net revenues of $615 million for
the three months ended December 31, 2006. Net income for the three
months ended December 31, 2007 was $12 million, compared to Net income
for the three months ended December 31, 2006 of $1 million. Basic and
diluted earnings per share for the three months ended December 31,
2007 was $0.21 compared to $0.03 for the three months ended December
31, 2006.

Net revenues for the year ended December 31, 2007 were $2.24
billion compared to $2.29 billion for the same period in 2006, a
decrease of 2%. Net loss for the twelve months ended December 31, 2007
was $12 million, compared to a Net loss for the twelve months ended
December 31, 2006 of $16 million. Basic and diluted loss per share for
the twelve months ended December 31, 2007 was $0.23 compared to a loss
of $0.29 for the same period in 2006.

Mortgage Production Segment

Net revenues for the three months ended December 31, 2007 for the
mortgage production segment were $38 million compared to Net revenues
of $61 million for the three months ended December 31, 2006. Segment
loss for the three months ended December 31, 2007 was $65 million
compared to segment loss of $56 million in the three months ended
December 31, 2006.

The increase in segment loss for the three months ended December
31, 2007 in comparison to the same period in 2006, was primarily due
to a decrease in Net revenues as a result of lower mortgage loan
origination volumes and lower gain on sale margins which were
negatively impacted by declines in the market value of our prime
closed-end second-lien loans. Although results for the three months
ended December 31, 2007 were negatively impacted by severance and
facility costs, total expenses were lower compared to the three months
ended December 31, 2006 due to cost reduction initiatives.

Total closings for the three months ended December 31, 2007
decreased 13% to $8.3 billion, compared to $9.6 billion for the same
period in 2006. Of this decline, purchase closings dropped 10% to $5.4
billion from $6.0 billion in the three months ended December 31, 2006
while refinance closings dropped 19% compared to the three months
ended December 31, 2006. Overall origination volumes were negatively
impacted by continued adverse conditions in the mortgage industry.

Net revenues for the year ended December 31, 2007 were $205
million compared to $329 million for the same period in 2006. For the
year ended December 31, 2007, segment loss was $225 million compared
to segment loss for the twelve months ended December 31, 2006 of $152
million. The increase in segment loss during the twelve months ended
December 31, 2007 was primarily due to a decrease in Gain on sale of
mortgage loans, net, which was adversely affected by the deterioration
of secondary mortgage market conditions. The Company had $1.6 billion
of Mortgage loans held for sale as of December 31, 2007 consisting of
79% of loans primarily conforming loans and loans which will be sold
under best efforts commitments, 13% jumbo loans, 6% scratch and dent
loans (loans with origination flaws or performance issues) and
closed-end second-lien loans, and 2% non-conforming Alt-A loans.

Highlights for the mortgage production segment included:

-- Twelve new private label client signings in 2007

-- In discussions with a number of potential private label
clients

-- Continued cost reduction efforts which totaled $36 million in
2007

Mortgage Servicing Segment

Net revenues for the three months ended December 31, 2007 for the
mortgage servicing segment were $38 million versus Net revenues of $50
million for the three months ended December 31, 2006. Segment profit
was $5 million for the three months ended December 31, 2007, compared
to segment profit of $30 million for the three months ended December
31, 2006.

The decrease in segment profit of $25 million during the three
months ended December 31, 2007 compared to the three months ended
December 31, 2006 was due primarily to losses (including direct
expenses) associated with the sale of mortgage servicing rights
("MSRs"), increases in reinsurance reserves, and higher foreclosure
related costs.

Net revenues for the twelve months ended December 31, 2007 were
$176 million versus $131 million for the twelve months ended December
31, 2006. Segment profit for the twelve months ended December 31, 2007
was $75 million compared to segment profit of $44 million in the same
period in 2006.

Highlights for the mortgage servicing segment included:

-- Sold $433 million of MSRs associated with $29.2 billion of the
unpaid principal balance of the underlying mortgage loans,
$218 million of which was received during 2007

-- Capitalized servicing rate (based on fair value) of the MSRs
at 1.19% as of December 31, 2007

-- Delinquency rate as a percentage of the total unpaid balance
of the mortgage loan servicing portfolio at 2.80% as of
December 31, 2007, which the Company believes compares
favorably to the industry

Fleet Management Services Segment

Net revenues for the three months ended December 31, 2007 for the
fleet management services segment were $475 million compared to Net
revenues in the three months ended December 31, 2006 of $505 million.
Segment profit for the three months ended December 31, 2007 was $35
million compared to $27 million for the three months ended December
31, 2006. The $35 million segment profit for the three months ended
December 31, 2007 included a $10 million reduction in accruals due to
the resolution of foreign non-income based tax contingencies.

The decrease of $30 million in Net revenues in the fourth quarter
of 2007 compared to the fourth quarter of 2006 was primarily due to
lower syndication volume resulting from a decrease in heavy truck
lease originations driven by lower industry-wide customer demand.

Also during the three months ended December 31, 2007 compared to
the three months ended December 31, 2006, the average number of leased
vehicles increased 2%, from 337,000 units to 343,000 units. Fuel card
units decreased 2% from 327,000 units to 321,000 units, maintenance
cards decreased 9% from 338,000 units to 309,000 units and accident
management vehicle units decreased 3% from 335,000 units to 325,000
units.

Net revenues for the year ended December 31, 2007 were $1.86
billion compared to $1.83 billion for the year ended December 31,
2006. Segment profit for the year ended December 31, 2007 was $116
million versus $102 million for the same period in 2006.

Highlights for the fleet management services segment included:

-- Thirteen new clients signed during the three months ended
December 31, 2007

-- Key maintenance partners added to the heavy truck and
equipment maintenance program during the year

-- Over 3,000 heavy trucks enrolled in the maintenance program as
of December 31, 2007

-- Signed a major new heavy truck account during the three months
ended December 31, 2007

Liquidity

The Company completed the renewal of the $2.9 billion funding
arrangement for Chesapeake Funding LLC, which will provide committed
funding for the fleet management services segment through February 26,
2009. In addition, it executed a $500 million mortgage repurchase
facility with Citigroup which will provide incremental funding
capacity for the Company's mortgage operations through February 26
2009. Given expectations for mortgage origination volumes, the Company
believes that the committed capacity provided by the renewal or
replacement of, or commitments for, various financing facilities
detailed in the Company's Current Reports on Form 8-K filed on
December 28, 2007, December 6, 2007, and November 2, 2007 and its
other existing credit facilities is adequate to fund the Company's
ongoing mortgage operations for at least the next 12 months. The
Company will continue to evaluate proposals to provide supplemental
capacity as necessary.

It should also be noted that the Company's mortgage loan
origination efforts since August 2007 have focused on a higher
concentration of conforming products, which has resulted in
accelerated sales of loans held for sale thus reducing the size of the
commitments needed to warehouse mortgage loans held for sale.
Investors should consult the Company's Form 10-K for the year ended
December 31, 2007 when it is filed, for more information regarding the
Company's financing activities.

Management Comments and Outlook

Terry Edwards, president and chief executive officer, stated,
"During the fourth quarter, our mortgage production segment
experienced slowing volume due to the disruption in the credit
markets. These market trends also negatively impacted gain on sale
margins. While substantially all of our commitments to fund new
originations during the quarter focused on prime loan products, both
conforming and non-conforming, we were negatively impacted by margins
on loans in inventory, largely closed-end second-lien mortgage loans,
that we are no longer originating.

"We continued to examine our mortgage production segment cost
structure after reducing expenses by approximately $36 million during
2007. During the year, headcount declined by approximately 700,
primarily in the mortgage production segment, and we closed certain
facilities. We believe we are right sized for $39 billion in mortgage
originations in 2008. Assuming current market conditions continue, we
believe this volume is achievable based on our new client signings and
refinance activity.

"Our business model should allow our mortgage production segment
to take advantage of the challenging housing and financial services
environment by entering into new outsource relationships. During 2007,
we signed 12 new private label relationships. So far in 2008, we were
pleased to sign Comerica Bank and The Dime Savings Bank of
Williamsburgh, and we remain focused on active discussions with
additional potential clients.

"While the uncertainty of the merger transaction negatively
impacted our marketing efforts during the year, we were pleased with
the performance of our fleet management services segment. A reversal
of foreign non-income based tax contingencies contributed $10 million
to pre-tax income during the quarter, however, the underlying business
still performed above plan. We expect that 2008 results will be
challenged by higher costs associated with asset-backed commercial
paper markets."

Mr. Edwards concluded, "We begin 2008 with guarded optimism. We
believe we have adequate liquidity to execute our forecast and that
PHH is well-positioned to operate in what will likely be a difficult
year for the financial services sector."

2008 Stockholders Meeting

PHH Corporation also announced that it will conduct its 2008
annual meeting of stockholders in Mt. Laurel, New Jersey at 10:00 a.m.
on May 20, 2008. Stockholders should consult the Notice of the 2008
Annual Meeting and Proxy Statement when it becomes available.

The Company will conduct a conference call for investors on Friday
morning, February 29 at 10:00 a.m. eastern standard time. Interested
investors can access the conference call by dialing 1-800-909-5202 or
1-785-830-7975 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 March 31, 2008
by dialing 1-888-203-1112 or 1-719-457-0820, using passcode 4005399,
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 2007

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 Securities Exchange Act of 1934, as amended. These
forward-looking statements include the following: (i) our belief that
our delinquency rates as a percentage of the total balance of our
unpaid mortgage loan servicing portfolio compares favorably to the
industry; (ii) our belief that our committed capacity is adequate to
fund our mortgage operations for the next 12 months and that we will
continue to evaluate proposals to provide supplemental capacity as
necessary; (iii) our belief that we are right sized for $39 billion of
mortgage loan originations (iv) our belief that we can achieve such
mortgage loan origination volume based on new client signings and our
expectations for refinance activity; (v) our expectation that our
business model will allow us to take advantage of the housing and
financial services market by entering into new private label outsource
arrangements; (vi) our expectations regarding our mortgage
originations from refinance activity during 2008; and (vii) our
beliefs that we have adequate liquidity to execute our forecast and
that we are well-positioned to operate in what will likely be a
difficult 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 Securities Exchange Act of 1934, as
amended, 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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PHH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per share data)

Three Months Year Ended
Ended December 31, December 31,
------------------- -----------------
2007 2006 2007 2006
--------- -------- -------- --------
Revenues
Mortgage fees $ 26 $ 31 $ 127 $ 129
Fleet management fees 42 41 164 158
--------- -------- -------- --------
Net fee income 68 72 291 287
--------- -------- -------- --------
Fleet lease income 408 444 1,598 1,587
--------- -------- -------- --------
Gain on sale of mortgage loans,
net 18 30 94 198
--------- -------- -------- --------
Mortgage interest income 71 95 351 363
Mortgage interest expense (55) (70) (267) (270)
--------- -------- -------- --------
Mortgage net finance income 16 25 84 93
--------- -------- -------- --------
Loan servicing income 105 132 489 515
--------- -------- -------- --------
Change in fair value of
mortgage servicing rights (277) (97) (509) (334)
Net derivative gain (loss)
related to mortgage servicing
rights 189 (13) 96 (145)
--------- -------- -------- --------
Valuation adjustments related
to mortgage servicing rights (88) (110) (413) (479)
--------- -------- -------- --------
Net loan servicing income 17 22 76 36
--------- -------- -------- --------
Other income 23 22 97 87
--------- -------- -------- --------
Net revenues 550 615 2,240 2,288
--------- -------- -------- --------
Expenses
Salaries and related expenses 77 79 326 336
Occupancy and other office
expenses 22 18 77 78
Depreciation on operating
leases 320 310 1,264 1,228
Fleet interest expense 54 52 213 195
Other depreciation and
amortization 7 9 29 36
Other operating expenses 102 145 376 419
--------- -------- -------- --------
Total expenses 582 613 2,285 2,292
--------- -------- -------- --------
(Loss) income before income
taxes and minority interest (32) 2 (45) (4)
(Benefit from) provision for
income taxes (41) -- (34) 10
--------- -------- -------- --------
Income (loss) before minority
interest 9 2 (11) (14)
Minority interest in (loss)
income of consolidated
entities, net of income taxes
of $2, $0, $(1) and $(1) (3) 1 1 2
--------- -------- -------- --------
Net income (loss) $ 12 $ 1 $ (12) $ (16)
========= ======== ======== ========
Basic and diluted earnings
(loss) per share $ 0.21 $ 0.03 $ (0.23) $ (0.29)
========= ======== ======== ========
Weighted-average common shares
outstanding:
Basic 54.160 53.751 53.939 53.648
========= ======== ======== ========
Diluted 54.933 54.585 53.939 53.648
========= ======== ======== ========
*T

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

December 31,
--------------
2007 2006
------ -------
ASSETS
Cash and cash equivalents $ 149 $ 123
Restricted cash 579 559
Mortgage loans held for sale, net 1,564 2,936
Accounts receivable, net 686 462
Net investment in fleet leases 4,224 4,147
Mortgage servicing rights 1,502 1,971
Investment securities 34 35
Property, plant and equipment, net 61 64
Goodwill 86 86
Other assets (1) 472 377
------ -------
Total assets $9,357 $10,760
====== =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 533 $ 494
Debt 6,279 7,647
Deferred income taxes 697 766
Other liabilities 287 307
------ -------
Total liabilities 7,796 9,214
------ -------
Commitments and contingencies -- --
Minority interest 32 31
Total stockholders' equity (2) 1,529 1,515
------ -------
Total liabilities and stockholders' equity $9,357 $10,760
====== =======

(1) Other assets include intangible assets of $43 million and $47
million as of December 31, 2007 and 2006, respectively.

(2) Outstanding shares of common stock were 54.079 million and 53.507
million as of December 31, 2007 and 2006, respectively.
*T

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PHH CORPORATION AND SUBSIDIARIES
CONSOLIDATING SEGMENT RESULTS
(Unaudited)
(In millions)

Segment (Loss)
Net Revenues Profit (1)
--------------------- --------------------
Three Months Three Months
Ended Ended
December 31, December 31,
------------- -------------
2007 2006 Change 2007 2006 Change
------ ------ ------- ------- ----- ------
(In millions)
Mortgage Production segment $ 38 $ 61 $(23) $(65) $(56) $ (9)
Mortgage Servicing segment 38 50 (12) 5 30 (25)
------ ------ ------- ------- ----- ------
Total Mortgage Services 76 111 (35) (60) (26) (34)
Fleet Management Services
segment 475 505 (30) 35 27 8
------ ------ ------- ------- ----- ------
Total reportable segments 551 616 (65) (25) 1 (26)
Other (2) (1) (1) -- (4) -- (4)
------ ------ ------- ------- ----- ------
Total Company $ 550 $615 $(65) $(29) $ 1 $(30)
====== ====== ======= ======= ===== ======
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Segment (Loss)
Net Revenues Profit (1)
---------------------- --------------------
Year Ended Year Ended
December 31, December 31,
--------------- -------------
2007 2006 Change 2007 2006 Change
------- ------- ------ ------ ------ ------
(In millions)
Mortgage Production
segment $ 205 $ 329 $(124) $(225) $(152) $(73)
Mortgage Servicing segment 176 131 45 75 44 31
------- ------- ------ ------ ------ ------
Total Mortgage Services 381 460 (79) (150) (108) (42)
Fleet Management Services
segment 1,861 1,830 31 116 102 14
------- ------- ------ ------ ------ ------
Total reportable segments 2,242 2,290 (48) (34) (6) (28)
Other (3) (2) (2) -- (12) -- (12)
------- ------- ------ ------ ------ ------
Total Company $2,240 $2,288 $ (48) $ (46) $ (6) $(40)
======= ======= ====== ====== ====== ======

(1) The following is a reconciliation of (Loss) income before income
taxes and minority interest to segment (loss) profit:
*T

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Three Months Year Ended
Ended December 31, December 31,
------------------- -------------
2007 2006 2007 2006
--------- ------- ------ ------
(In millions)
(Loss) income before income taxes
and minority interest $(32) $2 $(45) $(4)
Minority interest in income of
consolidated entities, net of
income taxes (3) 1 1 2
--------- ------- ------ ------
Segment (loss) profit $(29) $1 $(46) $(6)
========= ======= ====== ======

(2) Amounts included in Other represent intersegment eliminations and
amounts not allocated to our reportable segments. Segment loss of $4
million reported under the heading Other for 2007 represents expenses
related to the terminated Merger.

(3) Amounts included in Other represent intersegment eliminations and
amounts not allocated to our reportable segments. Segment loss of $12
million reported under the heading Other for 2007 represents expenses
related to the terminated Merger.
*T

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PHH CORPORATION AND SUBSIDIARIES
MORTGAGE PRODUCTION SEGMENT RESULTS
FOURTH QUARTER 2007 VS. FOURTH QUARTER 2006
(Unaudited)

Three Months
Ended December 31,
-------------------
2007 2006 Change % Change
--------- --------- -------- --------
(Dollars in millions, except
average loan amount)
Loans closed to be sold $ 5,976 $ 7,209 $(1,233) (17)%
Fee-based closings 2,333 2,377 (44) (2)%
--------- --------- -------- --------
Total closings $ 8,309 $ 9,586 $(1,277) (13)%
========= ========= ======== ========
Purchase closings $ 5,425 $ 6,044 $ (619) (10)%
Refinance closings 2,884 3,542 (658) (19)%
--------- --------- -------- --------
Total closings $ 8,309 $ 9,586 $(1,277) (13)%
========= ========= ======== ========
Fixed rate $ 5,610 $ 5,800 $ (190) (3)%
Adjustable rate 2,699 3,786 (1,087) (29)%
--------- --------- -------- --------
Total closings $ 8,309 $ 9,586 $(1,277) (13)%
========= ========= ======== ========
Number of loans closed (units) 37,526 47,485 (9,959) (21)%
========= ========= ======== ========
Average loan amount $221,404 $201,862 $19,542 10%
========= ========= ======== ========
Loans sold $ 6,348 $ 6,740 $ (392) (6)%
========= ========= ======== ========
Three Months
Ended December 31,
-------------------
2007 2006 Change % Change
--------- --------- -------- --------
(In millions)
Mortgage fees $ 26 $ 31 $ (5) (16)%
--------- --------- -------- --------
Gain on sale of mortgage loans,
net 18 30 (12) (40)%
--------- --------- -------- --------
Mortgage interest income 31 47 (16) (34)%
Mortgage interest expense (37) (49) 12 24%
--------- --------- -------- --------
Mortgage net finance expense (6) (2) (4) (200)%
--------- --------- -------- --------
Other income -- 2 (2) (100)%
--------- --------- -------- --------
Net revenues 38 61 (23) (38)%
--------- --------- -------- --------
Salaries and related expenses 45 48 (3) (6)%
Occupancy and other office
expenses 15 11 4 36%
Other depreciation and
amortization 3 5 (2) (40)%
Other operating expenses 43 52 (9) (17)%
--------- --------- -------- --------
Total expenses 106 116 (10) (9)%
--------- --------- -------- --------
Loss before income taxes (68) (55) (13) (24)%
Minority interest in (loss)
income of consolidated
entities, net of income taxes (3) 1 (4) n/m (1)
--------- --------- -------- --------
Segment loss $ (65) $ (56) $ (9) (16)%
========= ========= ======== ========

(1) n/m -- Not meaningful.
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PHH CORPORATION AND SUBSIDIARIES
MORTGAGE PRODUCTION SEGMENT RESULTS
YEAR ENDED DECEMBER 31, 2007 VS. YEAR ENDED DECEMBER 31, 2006
(Unaudited)

Year Ended
December 31,
-------------------
2007 2006 Change % Change
--------- --------- --------- --------
(Dollars in millions, except
average loan amount)
Loans closed to be sold $ 29,207 $ 32,390 $ (3,183) (10)%
Fee-based closings 10,338 8,872 1,466 17%
--------- --------- --------- --------
Total closings $ 39,545 $ 41,262 $ (1,717) (4)%
========= ========= ========= ========
Purchase closings $ 25,692 $ 28,509 $ (2,817) (10)%
Refinance closings 13,853 12,753 1,100 9%
--------- --------- --------- --------
Total closings $ 39,545 $ 41,262 $ (1,717) (4)%
========= ========= ========= ========
Fixed rate $ 25,525 $ 23,336 $ 2,189 9%
Adjustable rate 14,020 17,926 (3,906) (22)%
--------- --------- --------- --------
Total closings $ 39,545 $ 41,262 $ (1,717) (4)%
========= ========= ========= ========
Number of loans closed (units) 182,885 206,063 (23,178) (11)%
========= ========= ========= ========
Average loan amount $216,228 $200,238 $ 15,990 8%
========= ========= ========= ========
Loans sold $ 30,346 $ 31,598 $ (1,252) (4)%
========= ========= ========= ========
Year Ended
December 31,
-------------------
2007 2006 Change % Change
--------- --------- --------- --------
(In millions)
Mortgage fees $ 127 $ 129 $ (2) (2)%
--------- --------- --------- --------
Gain on sale of mortgage loans,
net 94 198 (104) (53)%
--------- --------- --------- --------
Mortgage interest income 171 184 (13) (7)%
Mortgage interest expense (190) (184) (6) (3)%
--------- --------- --------- --------
Mortgage net finance expense (19) -- (19) n/m (1)
--------- --------- --------- --------
Other income 3 2 1 50%
--------- --------- --------- --------
Net revenues 205 329 (124) (38)%
--------- --------- --------- --------
Salaries and related expenses 195 207 (12) (6)%
Occupancy and other office
expenses 49 50 (1) (2)%
Other depreciation and
amortization 15 21 (6) (29)%
Other operating expenses 170 201 (31) (15)%
--------- --------- --------- --------
Total expenses 429 479 (50) (10)%
--------- --------- --------- --------
Loss before income taxes (224) (150) (74) (49)%
Minority interest in income of
consolidated entities, net of
income taxes 1 2 (1) (50)%
--------- --------- --------- --------
Segment loss $ (225) $ (152) $ (73) (48)%
========= ========= ========= ========

(1) n/m -- Not meaningful.
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PHH CORPORATION AND SUBSIDIARIES
MORTGAGE SERVICING SEGMENT RESULTS
FOURTH QUARTER 2007 VS. FOURTH QUARTER 2006
(Unaudited)

Three Months
Ended December 31,
-------------------
2007 2006 Change % Change
--------- --------- ------- --------
(In millions)
Average loan servicing portfolio $163,056 $160,298 $2,758 2%
========= ========= ======= ========
Three Months
Ended December 31,
-------------------
2007 2006 Change % Change
--------- --------- ------- --------
(In millions)
Mortgage interest income $ 41 $ 49 $ (8) (16)%
Mortgage interest expense (21) (21) -- --
--------- --------- ------- --------
Mortgage net finance income 20 28 (8) (29)%
--------- --------- ------- --------
Loan servicing income 105 132 (27) (20)%
--------- --------- ------- --------
Change in fair value of mortgage
servicing rights (277) (97) (180) (186)%
Net derivative gain (loss)
related to mortgage servicing
rights 189 (13) 202 n/m (1)
--------- --------- ------- --------
Valuation adjustments related to
mortgage servicing rights (88) (110) 22 20%
--------- --------- ------- --------
Net loan servicing income 17 22 (5) (23)%
--------- --------- ------- --------
Other income 1 -- 1 n/m (1)
--------- --------- ------- --------
Net revenues 38 50 (12) (24)%
--------- --------- ------- --------
Salaries and related expenses 7 8 (1) (13)%
Occupancy and other office
expenses 3 2 1 50%
Other depreciation and
amortization 1 1 -- --
Other operating expenses 22 9 13 144%
--------- --------- ------- --------
Total expenses 33 20 13 65%
--------- --------- ------- --------
Segment profit $ 5 $ 30 $ (25) (83)%
========= ========= ======= ========

(1) n/m -- Not meaningful.
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PHH CORPORATION AND SUBSIDIARIES
MORTGAGE SERVICING SEGMENT RESULTS
YEAR ENDED DECEMBER 31, 2007 VS. YEAR ENDED DECEMBER 31, 2006
(Unaudited)

Year Ended
December 31,
-------------------
2007 2006 Change % Change
--------- --------- ------- --------
(In millions)
Average loan servicing portfolio $163,107 $159,269 $3,838 2%
========= ========= ======= ========
Year Ended
December 31,
-------------------
2007 2006 Change % Change
--------- --------- ------- --------
(In millions)
Mortgage interest income $ 182 $ 181 $ 1 1%
Mortgage interest expense (85) (86) 1 1%
--------- --------- ------- --------
Mortgage net finance income 97 95 2 2%
--------- --------- ------- --------
Loan servicing income 489 515 (26) (5)%
--------- --------- ------- --------
Change in fair value of mortgage
servicing rights (509) (334) (175) (52)%
Net derivative gain (loss)
related to mortgage servicing
rights 96 (145) 241 n/m (1)
--------- --------- ------- --------
Valuation adjustments related to
mortgage servicing rights (413) (479) 66 14%
--------- --------- ------- --------
Net loan servicing income 76 36 40 111%
--------- --------- ------- --------
Other income 3 -- 3 n/m (1)
--------- --------- ------- --------
Net revenues 176 131 45 34%
--------- --------- ------- --------
Salaries and related expenses 29 32 (3) (9)%
Occupancy and other office
expenses 10 10 -- --
Other depreciation and
amortization 2 2 -- --
Other operating expenses 60 43 17 40%
--------- --------- ------- --------
Total expenses 101 87 14 16%
--------- --------- ------- --------
Segment profit $ 75 $ 44 $ 31 70%
========= ========= ======= ========

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

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*T
PHH CORPORATION AND SUBSIDIARIES
FLEET MANAGEMENT SERVICES SEGMENT RESULTS
FOURTH QUARTER 2007 VS. FOURTH QUARTER 2006
(Unaudited)

Average for the
Three Months
Ended December 31,
-------------------
2007 2006 Change % Change
--------- -------- ------ ----------
(In thousands of units)
Leased vehicles 343 337 6 2%
Maintenance service cards 309 338 (29) (9)%
Fuel cards 321 327 (6) (2)%
Accident management vehicles 325 335 (10) (3)%
*T

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*T
Three Months
Ended
December 31,
-------------
2007 2006 Change % Change
------ ----- ------ --------
(In millions)
Fleet management fees $ 42 $ 41 $ 1 2%
Fleet lease income 408 444 (36) (8)%
Other income 25 20 5 25%
------ ----- ------ --------
Net revenues 475 505 (30) (6)%
------ ----- ------ --------
Salaries and related expenses 23 21 2 10%
Occupancy and other office expenses 4 5 (1) (20)%
Depreciation on operating leases 320 310 10 3%
Fleet interest expense 55 53 2 4%
Other depreciation and amortization 3 3 -- --
Other operating expenses 35 86 (51) (59)%
------ ----- ------ --------
Total expenses 440 478 (38) (8)%
------ ----- ------ --------
Segment profit $ 35 $ 27 $ 8 30%
====== ===== ====== ========
*T

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*T
PHH CORPORATION AND SUBSIDIARIES
FLEET MANAGEMENT SERVICES SEGMENT RESULTS
YEAR ENDED DECEMBER 31, 2007 VS. YEAR ENDED DECEMBER 31, 2006
(Unaudited)

Average for the
Year Ended
December 31,
---------------
2007 2006 Change % Change
------- ------- ------ ----------
(In thousands of
units)
Leased vehicles 342 334 8 2%
Maintenance service cards 326 339 (13) (4)%
Fuel cards 330 325 5 2%
Accident management vehicles 334 331 3 1%
*T

-0-
*T
Year Ended
December 31,
-------------
2007 2006 Change % Change
------ ------ ------ ----------
(In millions)
Fleet management fees $ 164 $ 158 $ 6 4%
Fleet lease income 1,598 1,587 11 1%
Other income 99 85 14 16%
------ ------ ------ ----------
Net revenues 1,861 1,830 31 2%
------ ------ ------ ----------
Salaries and related expenses 92 85 7 8%
Occupancy and other office expenses 18 18 -- --
Depreciation on operating leases 1,264 1,228 36 3%
Fleet interest expense 215 197 18 9%
Other depreciation and amortization 12 13 (1) (8)%
Other operating expenses 144 187 (43) (23)%
------ ------ ------ ----------
Total expenses 1,745 1,728 17 1%
------ ------ ------ ----------
Segment profit $ 116 $ 102 $ 14 14%
====== ====== ====== ==========
*T

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*T
PHH CORPORATION AND SUBSIDIARIES
MORTGAGE LOAN SERVICING PORTFOLIO
(Unaudited)

Portfolio Activity
Year Ended December 31,
-----------------------------
2007 2006 2005
--------- --------- ---------
(In millions)
Balance, beginning of period (1) $160,222 $154,843 $143,056
Additions (2) (3) 35,350 35,804 48,155
Payoffs, sales and curtailments (2) (4) (36,389) (32,555) (36,368)
Addition of certain subserviced home
equity loans as of June 30, 2006 (1) -- 2,130 --
--------- --------- ---------
Balance, end of period (1) $159,183 $160,222 $154,843
========= ========= =========
*T

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*T
Portfolio Composition

December 31,
-------------------
2007 2006
--------- ---------
(In millions)
Owned servicing portfolio $129,572 $150,533
Subserviced portfolio (5) 29,611 9,689
--------- ---------
Total servicing portfolio $159,183 $160,222
========= =========
Fixed rate $103,406 $100,960
Adjustable rate 55,777 59,262
--------- ---------
Total servicing portfolio $159,183 $160,222
========= =========
Conventional loans $146,630 $148,760
Government loans 8,417 7,423
Home equity lines of credit 4,136 4,039
--------- ---------
Total servicing portfolio $159,183 $160,222
========= =========
Weighted-average interest rate 6.1% 6.1%
========= =========
*T

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*T
Portfolio Delinquency (6)

December 31,
-----------------------------
2007 2006
-------------- --------------
Number Number
of Unpaid of Unpaid
Loans Balance Loans Balance
------ ------- ------ -------
30 days 2.22% 1.93% 2.19% 1.93%
60 days 0.53% 0.46% 0.46% 0.38%
90 or more days 0.48% 0.41% 0.36% 0.29%
------ ------- ------ -------
Total delinquency 3.23% 2.80% 3.01% 2.60%
====== ======= ====== =======
Foreclosure/real estate
owned/bankruptcies 1.02% 0.87% 0.80% 0.58%
====== ======= ====== =======
*T

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*T
(1) Prior to June 30, 2006, certain home equity loans subserviced for
others were excluded from the disclosed portfolio activity. As a
result of a systems conversion during the second quarter of 2006,
these loans subserviced for others are included in the portfolio
balance as of December 31, 2007 and 2006. The amount of home
equity loans subserviced for others and excluded from the
portfolio balance as of January 1, 2006 and 2005 was
approximately $2.5 billion and $2.7 billion, respectively.
(2) Excludes activity related to certain home equity loans subserviced
for others described above in the six months ended June 30, 2006
and the year ended December 31, 2005.
(3) During the fourth quarter of 2005, the Company purchased the loan
servicing portfolio of CUNA Mutual Mortgage Corporation ("CUNA")
and assumed its servicing and subservicing contracts. The
aggregate loan servicing portfolio purchased from CUNA was $9.7
billion, including a $2.9 billion subserviced portfolio.
(4) Includes $29.2 billion and $1.9 billion of the unpaid principal
balance of the underlying mortgage loans for which the associated
MSRs were sold during the years ended December 31, 2007 and 2006,
respectively. There were no sales of MSRs during the year ended
December 31, 2005.
(5) During the year ended December 31, 2007, the Company sold the MSRs
associated with $19.3 billion of the unpaid principal balance of
underlying mortgage loans; however, because the Company is
subservicing these loans 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
December 31, 2007.
(6) Represents the loan servicing portfolio delinquencies as a
percentage of the total number of loans and the total unpaid
balance of the portfolio.
*T

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

Three Months
Ended
December 31,
-------------
2007 2006
------ ------
(In millions)
Net derivative gain (loss) related to mortgage servicing
rights $ 189 $ (13)
Change in fair value of mortgage servicing rights due to
changes in market inputs or assumptions used in the
valuation model (215) (15)
------ ------
Net loss on MSRs risk management activities $ (26) $ (28)
====== ======
*T

-0-
*T
Year Ended
December 31,
-------------
2007 2006
------ ------
(In millions)
Net derivative gain (loss) related to mortgage servicing
rights $ 96 $(145)
Change in fair value of mortgage servicing rights due to
changes in market inputs or assumptions used in the
valuation model (194) 39
------ ------
Net loss on MSRs risk management activities $ (98) $(106)
====== ======
*T

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

As of December 31, 2007, available funding under our 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 $3,908 $3,556 $352
Mortgage warehouse 1,790 1,111 679
Unsecured Committed Credit
Facilities (2) 1,301 980 321
*T

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*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 $132 million which fully
supports the outstanding unsecured commercial paper issued by the
Company as of December 31, 2007. 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.
*T

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

Copyright Business Wire 2008