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   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt; border-bottom: 1px solid #000000"&gt;&lt;b&gt;11. Commitments and Contingencies&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&lt;b&gt;&lt;i&gt;Legal Contingencies&lt;/i&gt;&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;The Company is party to various claims and legal proceedings from time to time related to contract
   disputes and other commercial, employment and tax matters.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;PHH Mortgage Corporation, a wholly-owned subsidiary of the Company, is the defendant in a lawsuit
   initiated in 2009 in the United States District Court, Middle District of Georgia, by a borrower
   with a loan that has been serviced by the Company. The borrower alleged breach of contract,
   negligent servicing and violations of the Real Estate Settlement Procedures Act. On March&amp;#160;21,
   2011, the jury issued a verdict in favor of the borrower, awarding compensatory damages of $1
   million and punitive damages of $20&amp;#160;million, resulting in an exposure of $21&amp;#160;million.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;The Company intends to seek further judicial review of the case including appeal as necessary. The
   recorded liability for probable losses related to this matter as of March&amp;#160;31, 2011 was not
   significant.
   &lt;/div&gt;
   &lt;/div&gt;
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 -Name FASB Interpretation (FIN)
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 5
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