Consumer complaint received 2023-11-02
Company: PENNYMAC LOAN SERVICES, LLC.
State: CA
Product: Mortgage
Sub-product: VA mortgage
Issue: Struggling to pay mortgage
Sub-issue: An existing modification, forbearance plan, short sale, or other loss mitigation relief

Complaint:
During my financial hardship, I figured I could count on my mortgage company to support me. Instead of showing support, they put me in a worse position than I was before. I contacted them for a COVID forbearance XX/XX/2022. At the time, they were willing to help and put me in the right direction. They told me they could assist me due to my wifes loss of income during COVID. They told me they had two options that I could choose from that will allow me to be in a better financial state and that my interest rate of XXXX percent should not change. 

After the forbearance was over, they then told me that the only option I had was to either pay back the months that I owe in a balloon payment, or they can add it on the end of the loan. After they reached out to the VA and finalized the loan, they had added months on to my loan ( XXXX ) months and they changed my interest rate to 6.6 %. Instead of helping, this took my mortgage rate from being affordable to being a nightmare for an XXXX XXXX servicemember with a family of XXXX. 

They sent me paperwork regarding the new terms that had a one-time payment of {$3100.00} for the first month and a payment of {$2600.00} monthly for the duration of the loan. Additionally, they put a total of {$44000.00} in a junior XXXX mortgage. When I brought up the XXXX different payment amounts, they told me on the phone that I was reading it right with the first month payment of {$3100.00} and the rest of the payments would be {$2600.00}. Since we thought it was an increase of less than {$200.00} from our original mortgage payment of {$2400.00}, we went to get it notarized. None of this helped my family situation and we are not okay with the predatory nature in how PennyMac treats its customers. Over the course of this incident the following things happened that PennyMac viewed as helping my family.

Interest rate changed from 2.85 % to % 6.6 % They put a second mortgage on my loan that must be paid off when I refinance for {$44000.00}.

Said that my new payment was going to be {$2600.00} but it ended up being {$3100.00}.

Have less money going towards my principal balance. 
Overall, increased my mortgage by XXXX years and made my payment {$700.00} extra a month. 

This put me in a situation that as I was catching up, the new payment became a problem once I had flooding at my house while I was on XXXX  and my XXXX  was here with our XXXX children, including a newborn. We cleared out our savings to pay for the flooding. I reached out to PennyMac, and they told me that the only assistance they would be able to provide with the XXXX missed mortgage payments is let me pay it over XXXX months at {$4500.00} a month while they still report negative on my credit report. They are not looking to help and does not have the best interest of the client. 

Overall, in the past XXXX months, my monthly payment has increased {$2000.00}. I dont feel that I had a fair shake and that PennyMac effectively put everything that was available to me out there for me to decide. Now Im stuck without any hope in sight.

They recommended California Mortgage Relief to me. I reached out to them and they said that PennyMac has a reputation of telling their customers about them after they have already gotten them to agree to terms where they can increase their interest rates and keep them as customers for a longer period of time with a new higher interest rate. I still submitted to application to California Mortgage Relief and they told me if I would have made the payment then I would have qualified. I spoke with PennyMac and they told me that if the payment wasn't made, my family home would've been foreclosed on. I had no choice but to continue to struggle and attempt to make the payment prior to XXXX. When will this nightmare be over?

Company response to consumer: Closed with explanation