Last week, regulators from 49 states and the District of Columbia announced a $45 million settlement with PHH Mortgage Corporation. Left unsaid was how that settlement would become legally enforceable and whether it would fully exonerate PHH. The answers to those questions are: the settlement will become enforceable through the Dodd-Frank Act and, no, PHH could face further liability.

The much-ballyhooed settlement arises in connection with a federal lawsuit that state regulators filed in the District of Columbia on January 3, 2018. That same day, the parties also filed a consent judgment, which will acquire the force of law if and when the court approves it. The state regulators filed the lawsuit under the Dodd-Frank Act, which allows state attorneys-general and other public officials to sue in federal court over unfair, deceptive, or abusive acts or practices (UDAAP) or other violations of federal financial law. For good measure, the public authorities also threw into their complaint allegations under the consumer laws of their respective jurisdictions. The complaint alleges that, from 2009 to 2012, PHH Mortgage Corporation, through shoddy mortgage-servicing practices, improperly foreclosed or threatened foreclosure against thousands of homeowners. (Similar lawsuits were previously filed against other large mortgage servicers, including Bank of America and Wells Fargo.)

The driving force behind this case was the Multistate Mortgage Committee (MMC). According to the website of the American Association of Residential Mortgage Regulators (AARMR), that committee is “a representative body of state mortgage regulators appointed by [the Conference of State Bank Supervisors] and the [AARMR] to represent the examination interests of the combined states under the Nationwide Cooperative Protocol and Agreement for Mortgage Supervision.” The committee’s primary focus is on lenders operating in at least ten states.

The accompanying consent order, if approved, will not leave PHH fully in the clear. Rather, that agreement specifically does not allow for the release of claims by individual homeowners or classes of borrowers. Also, under the consent order, the settlement payments to borrowers (either $840 to people whose homes were foreclosed on or $285 to people against whom PHH brought foreclosure proceedings) are mere credits toward amounts owed to those individuals, not full payments. So don’t be surprised if groups of borrowers pursue PHH for additional recovery.