Proxy Battle for Control of PHH Heats Up

Hedge fund Pennant Capital Management has ratcheted-up its proxy battle for seats on the board of mortgage banker PHH Corp., with two candidates it hopes will unseat the lender/servicer's chairman and long time CEO. The dissident candidates are Gregory Parseghian, the former head of Freddie Mac, and Allan Loren, former chairman and CEO of Dun & Broadstreet. The two would replace PHH chairman A.B. Krongard, and CEO Terence Edwards, whose director terms expire at the June 10 shareholders meeting. PHH is the nation's fifth largest residential servicer with $150 billion in housing receivables, according to the Quarterly Data Report and National Mortgage News. At last check Pennant was PHH's largest shareholder with a 9.94% stake at the end of March. The hedge fund said its candidates will help reinvigorate the company. However, compared to many of its mortgage banking competitors, PHH's share price has held up rather well: in trading Wednesday, its stock was selling for $16.36, well above its 52-week low of $4.27 and just a few dollars below its high of $19.98. PHH reported net income of $2 million for the first quarter, though it lost $254 million last year. PHH is the nation's largest private label lender/servicer and has a large base of credit union customers.