Does your host support sending emails using the mail() function in PHP?
In the Email Password server behavior, try leaving the SMTP server blank.
Also try leaving the From Display name Blank.
If the email is still not being sent, ask the host if they can provide a sample script for sending email in PHP using the mail() command, they may require modifying the mail() function to pass an additional parameter. If they can provide a sample script, I will be able to see if there is some change needed to the email password code.