PHH: Restatement Could Be a Wash

Updating its earnings restatement process, PHH Corp., Mt. Laurel, N.J., says its financial statements for prior periods cannot be relied upon, but also indicated that reductions in pretax income will be offset by gains.PHH, the parent of private-label funder PHH Mortgage, also said it has entered into a $750 million line of credit with a syndicate of lenders led by Citicorp and Wachovia Bank. In a filing with the Securities and Exchange Commission, it stressed that it has adequate liquidity. Company president Terry Edwards said in a statement that "the long-term future of our private-label business is bright," adding that the company's "pipeline of prospects remains promising." Morgan Stanley has an "overweight" rating on the stock. A new report by Morgan notes that updated estimates of its accounting and tax-related issues are within $2 million of prior disclosures. PHH was spun off by Cendant Corp., New York, in the spring of 2005. It ranks 16th among residential originators in the United States, according to the Quarterly Data Report, a MortgageWire affiliate.