UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 11-K

 

þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

OR

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission File No. 1-7797

A. Full title of the plan and address of the plan, if different from that of the issuer named below:

PHH Home Loans, LLC Employee Savings Plan

B. Name of issuer of securities held pursuant to the plan and the address of its principal executive office:

PHH Corporation
3000 Leadenhall Road
Mt. Laurel, New Jersey 08054

 

 

TABLE OF CONTENTS

 

		Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31, 2010 and 2009			2
Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2010 and 2009			3
Notes to Financial Statements			4
SUPPLEMENTAL SCHEDULE:
Form 5500, Part IV, Schedule H, Line 4i – Schedule of Assets (Held at End of Year) as of December 31, 2010			12
SIGNATURES			13
EX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the PHH Home Loans, LLC Employee Benefits Committee and Participants of the PHH Home Loans, LLC Employee Savings Plan:

We have audited the accompanying statements of net assets available for benefits of the PHH Home Loans, LLC Employee Savings Plan (the “Plan”) as of December 31, 2010 and 2009, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2010 and 2009, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2010 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plan’s management. Such schedule has been subjected to the auditing procedures applied in our audit of the basic 2010 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

/s/ Deloitte & Touche LLP

Philadelphia, PA
June 29, 2011

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN

 

		December 31,
		2010				2009
ASSETS:
Cash and cash equivalents		$	12			$	128
Participant-directed investments, at fair value			75,363,915				64,318,849
Loans to participants			2,624,070				2,755,178
Receivables:
Participant contributions			174				1,559
Employer contributions			29				1,389
Interest and dividends			9,088				9,061
Total receivables			9,291				12,009
NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE			77,997,288				67,086,164
Adjustment from fair value to contract value for fully benefit responsive investment contracts (Note 2)			—				803,380
NET ASSETS AVAILABLE FOR BENEFITS		$	77,997,288			$	67,889,544

See Notes to Financial Statements.

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

 

		Year Ended December 31,
		2010				2009
ADDITIONS TO NET ASSETS:
Contributions:
Participant		$	5,158,501			$	5,021,574
Employer			2,480,189				2,464,549
Rollovers			38,293				53,435
Total contributions			7,676,983				7,539,558
Net investment income:
Interest and dividends			1,521,290				1,162,370
Net appreciation in investments			6,543,798				11,979,733
Total net investment income			8,065,088				13,142,103
Assets transferred in from the PHH Corporation Employee Savings Plan			1,147,679				1,033,433
Total net additions			16,889,750				21,715,094
DEDUCTIONS FROM NET ASSETS:
Benefits paid to participants			6,161,435				4,883,485
Assets transferred out to the PHH Corporation Employee Savings Plan			617,116				969,223
Administrative expenses			3,455				3,050
Total deductions			6,782,006				5,855,758
NET INCREASE IN NET ASSETS			10,107,744				15,859,336
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR			67,889,544				52,030,208
END OF YEAR		$	77,997,288			$	67,889,544

See Notes to Financial Statements.

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN

1. Description of the Plan

The following description of the PHH Home Loans, LLC Employee Savings Plan (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description or the Plan Document, which are available from the Plan sponsor, PHH Home Loans, LLC (the “Company”, “Home Loans” or the “Plan Sponsor”), for a more complete description of the Plan’s provisions.

General

The Plan is a defined contribution plan that provides Internal Revenue Code (“IRC”) Section 401(k) employee salary deferral benefits and employer contributions for the Company’s eligible employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan is administered by the Company and fiduciary responsibility for the Plan has been delegated by the Company’s Board of Directors to the Employee Benefits Committee (the “Plan Administrator”). Bank of America, N.A. (the “Trustee”) is the Plan’s trustee.

The Company was formed in connection with PHH Corporation’s (“PHH”) (NYSE: PHH) spin-off from Cendant Corporation (now known as Avis Budget Group, Inc.) effective February 1, 2005 and commenced operations in October 2005. Effective July 31, 2006, Cendant (now known as Avis Budget Group, Inc.) completed the spin-off of its real estate services division into an independent publicly traded company, Realogy Corporation (“Realogy”). The Company is a joint venture formed by PHH Broker Partner Corporation, a wholly owned subsidiary of PHH and Realogy Venture Partner LLC, a wholly owned subsidiary of Realogy. PHH Broker Partner holds a 50.1% ownership interest in the Company and Realogy Venture Partner LLC holds a 49.9% ownership interest in the Company. The Plan was formed effective October 1, 2005.

Plan Provisions

Eligibility. Each regular employee of the Company (as defined in the Plan Document) is eligible to participate in the Plan following the later of commencement of employment or the attainment of age eighteen. Each part-time employee of the Company (as defined in the Plan Document) is eligible to participate in the Plan following the later of one year of eligible service or the age of eighteen.

Participant Accounts. A separate account is maintained for each participant. Each participant’s account is credited with the participant’s contributions and allocations of the Company’s contributions and Plan earnings (losses), including interest, dividends and net realized and unrealized appreciation (depreciation) in investments; less certain administrative expenses. Allocations are based on participant account balances, as defined in the Plan Document. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Participant Contributions. Participants may elect to make pre-tax contributions to the Plan and may contribute from 1% to 40% of eligible compensation (as defined in the Plan Document), subject to the limitations described in the Plan and the IRC. Statutory annual maximum limits, which are adjusted each year by the IRC for cost of living increases, were $16,500 for 2010 and 2009. Certain eligible participants who are at least age 50 by December 31 are permitted to contribute a maximum of $5,500 as catch-up contribution provided participants first reach the plan imposed contribution limit or reach the statutory pre-tax maximum.

Employer Contributions. The Company provides matching contributions to the Plan equal to 100% of each eligible participant’s salary deferred up to 4% of such participant’s eligible compensation per pay period. Participants are eligible for the employer contribution following one year of service (as defined in the Plan Document) provided they are regularly scheduled to work at least 20 hours per week. Catch up contributions made by eligible participants are not matched by the Company.

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS

Rollovers. All participants, upon commencement of employment, are provided the option of making a rollover contribution into the Plan in accordance with Internal Revenue Service (“IRS”) regulations and Plan provisions.

Investments. Participants direct the investment of contributions to various investment options offered by the Plan and may reallocate investments (in 1% increments) or change future contributions on a daily basis. Only one reallocation is allowed each day. Participants should refer to each fund’s prospectus for a more complete description of the risks associated with each fund. Participants may be subject to penalties imposed by certain funds due to a participant’s failure to hold investments in such funds for specified periods of time. Contributions are invested in the Plan’s default investment option if no investment direction is provided by the participant. The qualified default investment alternative designated by the Plan is the Oakmark Equity & Income Fund.

Vesting. The Plan provides each eligible participant immediate fully vested rights in all employee, employer and rollover contributions regardless of the employee’s length of participation in the Plan or service with the Company.

Loans to Participants. Active participants may obtain a loan from the Plan and may only hold one outstanding loan at any time. Loans cannot exceed the lesser of (a) 50% of the participant’s vested account balance, provided the vested balance is at least $1,000 or (b) $50,000 reduced by the difference between the highest outstanding loan balance during the previous 12 months and the actual balance on the date of the loan. The loans are secured by the participant’s vested account balance and bear interest at a rate equal to the prime rate plus one percent. Loan repayments are made through payroll deductions over a term not to exceed five years, unless the proceeds of the loan are used to purchase or build the principal residence of the participant, in which case the loan maybe repaid over a period not to exceed 15 years.

Payment of Benefits to Participants. Participants are entitled to withdraw all or any portion of their vested accounts in accordance with the terms of the Plan and applicable law. Participants may make full or partial withdrawals of their salary deferral or rollover accounts upon attaining age 59 1/2 or for a hardship in certain circumstances (as defined in the Plan Document) before that age.

Upon termination of employment, the participant (or beneficiary in the event of death) is entitled to receive the entire account balance. In the event a terminated participant’s account balance is $1,000 or less, the account balance will be distributed in a lump sum payment without the participant’s consent. If the account balance is more than $1,000 but does not exceed $5,000, the account balance will automatically be rolled over into an Individual Retirement Rollover Account. For account balances which exceed $5,000, no distribution will be made unless the participant consents to a distribution. Benefits to participants are recorded upon distribution.

Forfeitures. At December 31, 2010 and 2009, forfeited nonvested accounts were $3,136 and $56,786, respectively. Forfeitures are applied first to pay administrative expenses of the Plan and any balance of forfeitures in excess of the administrative expenses during the Plan Year can be used to reduce employer contributions.

Transfers. PHH sponsors a 401(k) plan for eligible employees of PHH and its wholly-owned subsidiaries. If participants change their employer between Home Loans and PHH (or a wholly-owned subsidiary of PHH) during the year, their account balances are transferred into the corresponding plan.

Administrative Expenses. Administrative expenses of the Plan may be paid by PHH at its discretion; otherwise, such expenses are paid by the Plan. During the years ended December 31, 2010 and 2009, all Administrative expenses recorded by the Plan were primarily loan origination fees and associated expenses charged to applicable participant accounts. All other administrative expenses associated with the Plan were paid by PHH.

Plan Termination. Although it has not expressed any intent to do so, the Company reserves the right to modify, suspend, amend, discontinue or terminate the Plan in whole or in part at any time subject to the provisions of ERISA.

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies

Basis of Accounting

The financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

Cash and Cash Equivalents

The Plan includes highly liquid investments with original maturities of three months or less in cash and cash equivalents.

Investments and Income Recognition

Shares of registered investment companies are valued at the quoted market price, which represents the net asset value of shares held by the Plan at year-end. The Plan’s investments in common/collective trusts consist of funds that invest primarily in synthetic guaranteed investment contracts, money market funds, corporate and government bonds, mortgage-backed securities, bond funds, equity securities and fixed income securities. Synthetic guaranteed investment contracts are a combination of a portfolio of individual assets and a wrap contract typically issued by a financial institution or insurance company that provides that participant transactions are executed at contract value. Investments in these common/collective trusts are presented in the Statements of Net Assets Available for Benefits at the fair value of the underlying investments with an Adjustment from fair value to contract value for fully benefit responsive investment contracts presented as a separate line item which represents the gains and losses in market value of the underlying investments relative to wrap contract values. Contract values represent amounts contributed, plus the Plan’s pro-rata share of interest income earned by such fund, less administrative expenses and withdrawals. The Adjustment from fair value to contract value for fully benefit responsive investment contracts as of December 31, 2009 solely pertained to the Bank of America, N.A. Retirement Preservation Trust, (the “Trust”) which invested primarily in synthetic guaranteed investment contracts. On October 6, 2010, Bank of America, N.A. approved a resolution to terminate and commence liquidation of the assets of the Trust and, effective with the approval, the fund changed from a stable value fund to a short-term bond fund. The resolution resulted in the elimination of any existing wrap contracts of the Trust and the fund changed its accounting method from contract value to fair value accounting. The Trust terminated its operations on February 28, 2011 and was liquidated on March 1, 2011 at a net asset value per unit of $1.00. As of December 31, 2010, the Plan had no investments in common/collective trusts which invested in synthetic guaranteed investment contracts and the Plan’s investment in the Trust are recorded at fair value.

Management fees and operating expenses charged to the Plan for investments in mutual funds are deducted from income earned on a daily basis and are not separately stated. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.

Purchases and sales of securities are recorded on a trade-date basis. The Statements of Changes in Net Assets Available for Benefits present Net appreciation in investments, which includes unrealized gains and losses on investments held at December 31, 2010 and 2009 and realized gains and losses on investments sold during the years then ended. Dividends are recorded on the ex-dividend date and interest is recorded when earned.

Fair Value Measurements

A three-level valuation hierarchy is used to classify inputs into the measurement of assets and liabilities at fair value. The valuation hierarchy is based upon the relative reliability and availability to market participants of inputs for the valuation of an asset or liability as of the measurement date. When the valuation technique used in determining the fair value of an asset or liability utilizes inputs from different levels of the hierarchy, the level

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS

within which the measurement in its entirety is categorized is based upon the lowest level input that is significant to the measurement in its entirety.

The three levels of this valuation hierarchy consist of the following:

Level One. Level One inputs are unadjusted, quoted prices in active markets for identical assets or liabilities which the Plan Administrator has the ability to access at the measurement date.

Level Two. Level Two inputs are observable for that asset or liability, either directly or indirectly, and include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, observable inputs for the asset or liability other than quoted prices and inputs derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified contractual term, the inputs must be observable for substantially the full term of the asset or liability.

Level Three. Level Three inputs are unobservable inputs for the asset or liability that reflect the Plan Administrator’s assessment of the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, and are developed based on the best information available.

The Plan Administrator determines fair value based on quoted market prices, where available. If quoted prices are not available, fair value is estimated based upon other observable inputs. The Plan Administrator uses unobservable inputs when observable inputs are not available. Adjustments may be made to reflect the assumptions that market participants would use in pricing the asset or liability.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Plan Administrator to make estimates and assumptions that affect the amounts reported and related disclosures. Actual results could differ from those estimates.

Risks and Uncertainties

The Plan invests in various securities including mutual funds, common/collective trusts, money market funds and common stock. Investment securities are exposed to various risks such as interest rate and credit risks and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that those changes could materially affect the amounts reported in the financial statements.

Subsequent Events

Subsequent events are evaluated through the date of filing with the Securities and Exchange Commission.

Changes in Accounting Policies

Fair Value Measurements. In January 2010, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2010-06, “Improving Disclosures about Fair Value Measurements” which amends ASC 820, “Fair Value Measurements and Disclosure.” This new accounting guidance adds new disclosure requirements about the level of disaggregation and about the valuation techniques and inputs used. The updates to ASC 820 also add disclosures about transfers in and out of level one and level two of the valuation hierarchy and include separate disclosures of purchases, sales, issuances, and settlements relating to level three measurements. The Plan adopted the updates to ASC 820 effective January 1, 2010 except for the requirement to provide additional disclosures about the activity in the reconciliation of level three activity, which will be effective for fiscal years beginning after December 15, 2010. The Plan does not currently hold any assets classified as level three. The adoption did not have an impact, and future adoption is not expected to have an impact, on the Plan’s financial statements.

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS

Participant Loans. In September 2010, the FASB issued ASU No. 2010-25, “Reporting Loans to Participants by Defined Contribution Pension Plans.” This new accounting guidance requires that participant loans be classified as notes receivable rather than a Plan investment and measured at unpaid principal balance plus accrued but unpaid interest. ASU 2010-25 was effective for fiscal years ending after December 15, 2010, with early adoption permitted, and was required to be applied retrospectively. The adoption did not have an impact on the Plan’s financial statements.

3. Investments

The following table presents investments (at fair value) that represent five percent or more of the Plan’s Net assets available for benefits:

		December 31,
		2010				2009
Bank of America, N.A. Retirement Preservation Trust (1) (2)		$	13,116,987			$	11,075,178
Pimco Total Return Fund			8,962,006				7,525,807
Harbor International Fund			7,279,466				6,558,555
Davis New York Venture Fund			5,588,031				4,938,563
Goldman Sachs Growth Opportunities Fund			5,372,845				4,739,122
Harding Loevner Emerging Markets Collective Investment Fund			4,708,893				4,271,415
Oppenheimer Capital Appreciation Fund			4,478,946				4,048,193
The Oakmark Equity and Income Fund (3)			3,831,843				3,961,815

The Plan’s investments (including gains on investments bought and sold, as well as held during the year) appreciated in value as follows:

		Year Ended December 31,
		2010				2009
Mutual funds		$	5,351,617			$	9,908,427
Common/collective trusts			1,156,104				2,050,934
Common stocks (1)			36,077				20,372
		$	6,543,798			$	11,979,733

4. Fair Value Measurements

See Note 2 – Summary of Significant Accounting Policies for a description of the valuation hierarchy of inputs used in determining fair value measurements.

Mutual Funds. The Plan’s investments in mutual funds are classified in Level One of the valuation hierarchy with the fair value determined by quoted market prices, which represent the net asset value of shares held by the Plan at year-end.

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS

Common/Collective Trusts. The Plan’s investments in common/collective trusts are classified in Level Two of the valuation hierarchy. Common/collective trusts are not traded in active markets and fair value is estimated based upon the significance of unobservable inputs and the Plan’s ability to redeem the investments at the stated price on the measurement date.

The fair value of common/collective trusts is estimated by valuing underlying investment asset prices through actual trade data, benchmark yield data, broker or dealer quotes, issuer spread data and other reference information. The Plan can redeem these investments at the stated price on December 31, 2010.

Money Market Funds. The Plan’s investments in money market funds are classified in Level Two of the valuation hierarchy with the fair value estimated based upon the significance of unobservable inputs utilized to determine the fair value of the investment holdings underlying the money market funds.

Common Stock. The Plan’s investments in common stock are classified in Level One of the valuation hierarchy and the fair value is determined by the last reported sales price on a national securities exchange on the last business day of the Plan year.

The Plan’s assets that are measured at fair value on a recurring basis were as follows:

		December 31, 2010
		Level				Level				Level
		One				Two				Three				Total
Participant-directed investments:
Mutual funds:
Growth funds		$	14,684,072			$	—			$	—			$	14,684,072
Blended funds			11,056,771				—				—				11,056,771
Fixed income funds			9,818,785				—				—				9,818,785
International funds			9,635,118				—				—				9,635,118
Value funds			5,648,054				—				—				5,648,054
Balanced fund			3,831,843				—				—				3,831,843
Common/collective trusts:
Fixed income fund			—				13,116,987				—				13,116,987
International emerging markets fund			—				4,708,893				—				4,708,893
Index fund			—				2,590,052				—				2,590,052
Money market funds			—				201,407				—				201,407
Common stock			71,933				—				—				71,933
Total Participant-directed investments		$	54,746,576			$	20,617,339			$	—			$	75,363,915

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS

		December 31, 2009
		Level				Level				Level
		One				Two				Three				Total
Participant-directed investments:
Mutual funds:
Growth funds		$	12,759,648			$	—			$	—			$	12,759,648
Blended funds			8,931,348				—				—				8,931,348
International funds			8,262,724				—				—				8,262,724
Fixed income funds			8,231,680				—				—				8,231,680
Value funds			4,711,327				—				—				4,711,327
Balanced fund			3,961,815				—				—				3,961,815
Common/collective trusts:
Stable value fund			—				11,075,178				—				11,075,178
International emerging markets fund			—				4,271,415				—				4,271,415
Index fund			—				1,929,027				—				1,929,027
Money market funds			—				99,006				—				99,006
Common stock			85,681				—				—				85,681
Total Participant-directed investments		$	46,944,223			$	17,374,626			$	—			$	64,318,849

5. Federal Income Tax Status

The Plan has received a determination letter from the IRS dated October 11, 2007 stating that the Plan is qualified and is designed to operate in accordance with applicable provisions of the IRC. This determination was subject to the Plan Administrator’s adoption of certain amendments, which occurred subsequent to the date of the IRS determination letter. Additionally, the Plan Administrator adopted additional amendments to the Plan subsequent to the date of this determination by the IRS. The Plan Administrator believes that the Plan is currently designed and being operated, as amended, in compliance with the applicable requirements of the IRC and may be amended, as necessary, to continue to comply with applicable requirements. Therefore, no provision for income tax has been included in the Plan’s financial statements.

GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2010, there are no uncertain positions taken, or expected to be taken, that would require recognition of a liability or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2007.

6. Exempt Party-in-Interest Transactions

A portion of the Plan’s investments represent shares in funds managed by the Trustee. These transactions qualify as exempt party-in-interest transactions.

The Plan’s investments also include 3,107 and 5,319 shares of PHH common stock as of December 31, 2010 and 2009, respectively with a fair value of $71,933 and $85,681, respectively. During the years ended December 31, 2010 and 2009, the Plan recorded net appreciation in fair value for shares of PHH common stock of $36,077 and $20,372, respectively.

On January 8, 2008, the Company informed Plan participants of its decision to permanently suspend all further purchases of PHH common stock within the Plan effective January 1, 2008. Participants holding shares of PHH

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS

common stock as of January 1, 2008 were permitted to hold, sell, redeem or transfer their current holdings subject to the applicable Plan provisions and Company policy. Effective January 1, 2012, PHH common stock will be eliminated as a Plan investment option and Plan participants have been informed to sell, redeem or transfer their holdings in PHH common stock by December 31, 2011 or any remaining Plan assets held in shares of PHH common stock as of December 31, 2011 will be sold and proceeds will be transferred into the Oakmark Equity and Income Fund, the Plans qualified default investment alternative.

7. Reconciliation of Financial Statements to Form 5500

The following is a reconciliation of net increase in Net assets available for benefits as presented in the Statement of Changes in Net Assets Available for Benefits to net income per Form 5500 for the year ended December 31, 2010:

Statement of Changes in Net Assets Available for Benefits:
Net increase in net assets per the financial statements		$	10,107,744
Assets transferred in from the PHH Corporation Employee Savings Plan			(1,147,679	)
Assets transferred out to the PHH Corporation Employee Savings Plan			617,116
Net income per Form 5500		$	9,577,181

PHH HOME LOANS, LLC EMPLOYEE SAVINGS PLAN

Identity of Issue, Borrower, Current

Description

Current

Lessor or Similar Party

of Investment

Cost (1)

Value

PHH Corporation Common Stock(2)

Common stock

$

71,933

Bank of America, N.A. Retirement Preservation Trust(2)

Common/collective trust

13,116,987

Harding Loevner Emerging Markets Collective Investment Fund

Common/collective trust

4,708,893

Bank of America, N.A. Equity Index Trust (2)

Common/collective trust

2,590,052

Pimco Total Return Fund

Mutual fund

8,962,006

Harbor International Fund

Mutual fund

7,279,466

Davis New York Venture Fund

Mutual fund

5,588,031

Goldman Sachs Growth Opportunities Fund

Mutual fund

5,372,845

Oppenheimer Capital Appreciation Fund

Mutual fund

4,478,946

Harbor Small Cap Value Fund

Mutual fund

3,851,280

The Oakmark Equity and Income Fund

Mutual fund

3,831,843

Pioneer Mid-Cap Value Fund

Mutual fund

3,606,837

American Growth Fund of America

Mutual fund

3,404,267

Oppenheimer International Growth Fund

Mutual fund

2,355,652

MFS Value Fund

Mutual fund

2,041,217

DWS RReef Real Estate Securities Fund

Mutual fund

1,617,460

Vanguard Explorer Fund

Mutual fund

1,428,014

Lord Abbett Bond Debenture Fund

Mutual fund

856,779

FFI Government Fund

Money market fund

201,407

Loans to participants(3)

2,624,070

Cash and cash equivalents

12

Total

$

77,987,997

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 29, 2011