Consumer complaint received 2015-06-29
Company: PENNYMAC LOAN SERVICES, LLC.
State: MD
Product: Mortgage
Sub-product: Conventional fixed mortgage
Issue: Loan modification,collection,foreclosure

Complaint:
We submitted an application for a loan modification to PennyMac. PennyMac denied the application via a letter dated XXXX XXXX, 2015. PennyMac failed to include in its denial letter the name of the investor and the NPV results. Pasted below is the excerpt from my letter to PennyMac. 
PennyMac claims the XXXX following reasons that the application for a loan modification was denied as stated on Exhibit A of PennyMac 's XXXX XXXX, 2015, letter : Capitalized Loan to Value ( LTV ) Excessive Forbearance Housing Expense Ratio Outside of Acceptable Range Insufficient Net Cash FlowPennyMac has failed to provide the total capitalized unpaid principal balance, the value of subject property, the income and debts used in its calculations. These are all data inputs used in calculating NPV ( net present value ). See Home Affordable Modification Program, Base Net Present Value ( NPV ) Mode XXXX Model Documentation here : XXXX See pages XXXX that state the NPV model inputs - these inputs include unpaid principal balance before modification, property valuation, borrower 's total monthly obligations and monthly gross income. As PennyMac is claiming the reasons for denial include the LTV and the inability to come up with an acceptable modified payment and insufficient net cash flow then these values must be disclosed as PennyMac engaged in a net present value calculation. 
As explained in the Comments to 12 C.F.R. 1024 ( d ), if a trial or permanent loan modification is denied because of a net present value calculation, then the denial notice must include all the inputs used in the net present value calculation. 12 C.F.R. 1024, Supp. I, 41 ( d ) cmt. 2. PennyMac 's XXXX XXXX, 2015, letter does not include any inputs it used in this calculation. This is exactly the kind of information called for by RESPA to enable borrowers to make an informed decision about whether they should appeal the servicer 's loss mitigation determination or pursue other options. PennyMac failed to provide it. 

In its XXXX XXXX, 2015, letter PennyMac states " We may order an appraisal or other forms of valuations to determine the property 's value in the course of reviewing your application. If we do order any valuations in connection with the application in determining whether your loan qualifies for a loan modification, a copy of the valuation ( s ) will be enclosed with this notice, if applicable. '' Clearly the value of the subject was used in reviewing the application as one of the reasons for the denial is due to capitalized loan to value. The value in " loan to value '' is the valuation of the home yet PennyMac failed to enclose with its letter any valuations of the property. PennyMac representatives disclosed to me that PennyMac had a BPO completed on XXXX XXXX, 2015, that resulted in a value of {$69000.00}. Is that the value that PennyMac utilized in reviewing this application?

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation