Nov. 25 (Bloomberg) -- PHH Corp., the New Jersey-based mortgage and auto-leasing company, is in ``peril'' because of mismanagement and should try to become profitable immediately rather than focus on the long term, the largest shareholder said.

Pennant Capital Management LLC, which owns 10 percent of the company, or 5.4 million shares, ``strongly believe that any long-term options simply will not be there if immediate action is not taken to restore profitability,'' it said in a filing with the U.S. Securities and Exchange Commission.

The board should name a committee of non-management directors to ensure prompt response to a review being conducted by new Chief Financial Officer Sandra Bell, Pennant said in the filing. PHH, which had losses in 2006 and 2007, on Nov. 10 reported a wider third quarter loss of $84 million.

Shares of the Mt. Laurel, New Jersey-based company rose after the filing, ending up 42 cents, or 6.4 percent, to $7.03 at 4 p.m. in New York Stock Exchange composite trading. They have plummeted 54 percent since Aug. 29.

PHH spokeswoman Karen McCallson didn't immediately return a call seeking comment.

To contact the reporter on this story: Peter J. Brennan in Los Angeles at pbrennan3@bloomberg.net.

Last Updated: November 25, 2008 17:47 EST