It’s been five years since the housing crisis challenged the servicing community with a slew of foreclosures and distressed borrowers, but servicing firms are still feeling the negative impact of loan servicing practices enacted at the time.

Servicer PHH Mortgage (PHH) just resolved an investigation launched by the state of New Jersey into the firm’s handling of troubled homeowners during the loan modification and foreclosure processes.  

Acting New Jersey Attorney General John Hoffman secured a $6.25 million settlement with PHH Mortgage on Wednesday. The deal includes $3.61 million in restitution for 2,000 borrowers.

The AG’s office accused the servicer of misleading borrowers as they sought loan modifications in an attempt to avoid delinquency or foreclosure.

Payments to consumers impacted by the settlement will be made within 30 days of the deal’s effective date. About 44 borrowers who saw their homes sold at auction while their loan modifications were pending are expected to receive $10,000 each.

Another $2.64 million will be paid to the state.

In addition to the payment, PHH agreed to adopt national servicing standards.

The investigation began back in 2011 when borrowers complained about receiving inaccurate statements from PHH in regard to the foreclosure process. Others alleged the filing of improper fees.

As part of the deal, PHH – the nation’s ninth largest residential mortgage servicer – agreed to the changes, but did not admit to any wrongdoing or liability.

For two years, PHH is required to provide the state with quarterly updates on its servicing practices.