Judge Slashes Jury Award to Delinquent Homeowner to $158,000 from $16 Million.

A California judge has sharply reduced the damages awarded by a jury in a case involving a complaint against a Mount Laurel mortgage firm.

A jury in July said PHH Corp. should pay more than $16 million to Phillip Linza, a homeowner who faced foreclosure when the company bungled his mortgage modification.

But Superior Court Judge Steven Berrier in Yuba County slashed the damages to $158,000, an attorney in the case said Thursday.

Stephen Foondos, a lawyer for Linza, said he plans to appeal the judge's ruling.

PHH said the decision "confirmed our belief that the previous verdict was not supported by the facts presented in this case or by applicable law.

"We take our responsibilities to borrowers seriously and remain committed to meeting all of our obligations as a servicer," the firm said in a statement. PHH is the nation's ninth largest mortgage servicer.

Foondos said Berrier allowed an award only for PHH's misconduct during the modification process, and reduced compensatory damages from $513,000.The judge entirely denied punitive damages of $15.7 million, describing the dispute as a breach of contract, Foondos said.

"This is fundamentally more than a breach of contract case," Foondos asserted.

He also said Monday's ruling was "still justice," describing the reduced damages as "a significant sum."

Foondos also said the ruling "emboldens the nationwide movement toward holding servicers accountable for mistreating its customers in the servicing of their loan."

In his lawsuit, Linza said he modified his mortgage to cut monthly payments from about $2,100 to $1,500. But PHH said his new payment would actually rise to $2,300, which caused Linza to almost lose his home in the northern California town of Plumas Lakes.

Separately, PHH agreed in December to pay $6.25 million to settle complaints from customers who sought help to avoid foreclosure. The payment included $3.62 million for more than 2,000 customers and $2.5 million for the state of New Jersey, which began a probe into PHH practices in 2011.

The agreement with the state Attorney General's Office said PHH delayed the loan-approval process in part by failing to maintain adequate staffing, training and technology. It admitted no wrongdoing in the December settlement.

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