77776--2/29/2008--PHH

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{investment, property, distribution}

{condition, economic, financial}

{financial, litigation, operation}

{regulation, change, law}

{loss, insurance, financial}

{regulation, government, change}

{competitive, industry, competition}

{stock, price, share}

{provision, law, control}

{debt, indebtedness, cash}

{interest, director, officer}

{capital, credit, financial}

{product, market, service}

{loan, real, estate}

{operation, international, foreign}

Adverse developments in general business, economic, environmental and political conditions could have a material adverse effect on our business, financial position, results of operations or cash flows. We might be prevented from selling and/or securitizing our mortgage loans at opportune times and prices, if at all, which could have a material adverse effect on our business, financial position, results of operations or cash flows. Recent developments in the secondary mortgage market could have a material adverse effect on our business, financial position, results of operations or cash flows. Downward trends in the real estate market could adversely impact our business, profitability or results of operations. Recent developments in the asset-backed securities market have negatively affected the value of our MLHS and our costs of funds, which could have a material and adverse effect on our business, financial position, results of operations or cash flows. Our business is affected by fluctuations in interest rates, and if we fail to manage our exposure to changes in interest rates effectively, our business, financial position, results of operations or cash flows could be adversely affected. Certain hedging strategies that we use to manage interest rate risk associated with our MSRs and other mortgage-related assets and commitments may not be effective in mitigating those risks. We are exposed to counterparty credit risk and there can be no assurances that we will manage or mitigate this risk effectively. Our business relies on various sources of funding, including unsecured credit facilities and other unsecured debt, as well as secured funding arrangements, including asset-backed securities, mortgage repurchase facilities and other secured credit facilities. If any of our funding arrangements are terminated or not renewed, we may be unable to find replacement financing on commercially favorable terms, if at all, which could have a material adverse effect on our business, financial position, results of operations or cash flows. The industries in which we operate are highly competitive and, if we fail to meet the competitive challenges in our industries, it could have a material adverse effect on our business, financial position, results of operations or cash flows. Changes in existing U.S. government-sponsored mortgage programs could materially and adversely affect our business, financial position, results of operations or cash flows. The businesses in which we engage are complex and heavily regulated, and changes in the regulatory environment affecting our businesses could have a material adverse effect on our financial position, results of operations or cash flows. Our Fleet Management Services business contracts with various government agencies, which may be subject to audit and potential reduction of costs and fees. If certain change in control transactions occur, some of our mortgage loan origination arrangements with financial institutions could be subject to termination at the election of such institutions. Unanticipated liabilities of our Fleet Management Services segment as a result of damages in connection with motor vehicle accidents under the theory of vicarious liability could have a material adverse effect on our business, financial position, results of operations or cash flows. A failure to maintain our investment grade ratings could impact our ability to obtain financing on favorable terms and could negatively impact our business. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they require management to make assumptions and estimates about matters that are inherently uncertain. Changes in accounting standards issued by the Financial Accounting Standards Board (the FASB ) or other standard-setting bodies may adversely affect our reported revenues, profitability or financial position. We depend on the accuracy and completeness of information provided by or on behalf of our customers and counterparties. An interruption in or breach of our information systems may result in lost business, regulatory actions or litigation or may otherwise have an adverse effect on our reputation, business, business prospects, financial condition, results of operations or cash flows. The success and growth of our business may be adversely affected if we do not adapt to and implement technological changes. Risks Related to the Spin-Off Our agreements with Cendant and Realogy may not reflect terms that would have resulted from arm s-length negotiations between unaffiliated parties. We may be required to satisfy certain indemnification obligations to Cendant or Realogy, or we may not be able to collect on indemnification rights from Cendant or Realogy. Certain arrangements and agreements that we have entered into with Cendant in connection with the Spin-Off could impact our tax and other assets and liabilities in the future, and our financial statements are subject to future adjustments as a result of our obligations under those arrangements and agreements. Our historical financial information may not be representative of results we would have achieved as an independent company or will achieve in the future. Risks Related to our Common Stock There may be a limited public market for our Common stock and our stock price may experience volatility. Provisions in our charter documents, the Maryland General Corporation Law (the MGCL ) and our stockholder rights plan may delay or prevent our acquisition by a third party.

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77776--2/29/2008--PHH_CORP