Consumer complaint received 2022-11-18
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — 
Company: PENNYMAC LOAN SERVICES, LLC. (CA)

I have encountered several issues with PENNYMAC as a mortgage company.

When I first started with them they sent me a letter stating that they did not have proof of hazard insurance on file so I provided hazard insurance to them. Then they bought hazard insurance on my behalf and removed the money from my escrow account. I had to call them and have this corrected so they cancelled that hazard insurance and put the money back. While calling on that issue I asked a very important question and it was of my hazard insurance that I just provided was sufficient enough for my loan and I was told yes I asked do I need fire insurance and the reason I asked was because in the past on previous loans with another mortgage company I had to have the extra fire insurance because of where I live and I thought it was strange I didnt need to on this one I was told no and that my current insurance with XXXX XXXX was sufficient. Because of where I live I actually did get fire coverage through the CA FAIR PLAN but in my own accord just to feed safe but I did not provide that proof to PENNYMAC since they didnt need it. Then when it came time to renew my fire insurance they asked about my mortgage company so they could update and make sure the information on my file was correct so my insurance agent provided and updated that information. They then sent PENNYMAC proof of insurance which I didnt ask them to but that was fine except then PENNYMAC sent me a letter saying they received my new insurance company and paid them and removed XXXX speciality from my account! Now at this point they have placed a FIRE ONLY coverage as my hazard insurance and removed my actual hazard insurance which if I wouldnt have noticed or read the letter it would have been left that way and in the event that anything happened other than fire to my house I would have NOT been covered. So I had to find time to get on the phone with PENNYMAC once again to resolve the problem I called advised of the issue so they then put the XXXX specialty back on which when this happened since they removed it they didnt send payment automatically like they should have to that policy almost cancelled out completely. The other issue was the CA FAIR plan was just a proof of insurance not a bill and PENNYMAC paid them which I had already set up that policy and had paid half of it on an agreement plan with them. I then had to get my agent involved to see about getting a refund from CA FAIR plan. Then because of the two payments to insurances going out when my escrow analysis came up a few weeks later it was showing that my insurance premiums doubled so then my mortgage then went up when I called to speak with them about that they said there isnt anything that can be done they need to wait till next year to review the escrow analysis at that point I advised I did not want my fair insurance escrowed I want to continue to pay it by myself because that makes it easier for me and still by this point not one person said it was required so they said okay they would remove it from being escrowed for next year just leaving XXXX speciality there. Well fast forward a few months I get a letter stating they dont have proof of insurance for XXXX we are already in the middle of XXXX and being told they dont have proof of insurance?? So I take them again to call and they proceed to tell me that they need proof of fire insurance for XXXX because the recent events with the mishap with my escrow account and insurances had my file reviewed and they didnt see it for XXXX so they need proof i had it or the insurance that they just purchased on my behalf can not be cancelled so at this point they just purchased fire insurance from some Company and a high rate for the year or XXXX a whole year ago we had already passed the whole entire term of that policy but I was having to pay for it out of my escrow account? I dont know how that is legal at all first because how could I even be sure that money was being sent to the actual insurance company for a policy for a whole year ago? And second I was never told to have fire insurance because as I said before when I first got PENNYMAC as a mortgage company and they messed up my insurance and I spoke with someone I confirmed I did not need it. Now when I asked these questions the rep continued to just say in the state they are required to make sure there loans are all correct and since mine was not they need me to buy this insurance for XXXX to make sure If they get audited that it would not come back on them! Also because of this my mortgage was again about to go about and not just {$200.00} like the first time but another almost {$400.00} because the premium was so high on the fire plan they purchased for me. Now I am very very upset, PENNYMAC is trying to cover their own XXXX on this but at my expense! Obviously the insurance department does not know how to read the evidence of insurance that goes to them because back in XXXX when I provided them with my hazard insurance they would have told me right then that yes you need fire coverage and guess what I actually had fire coverage so it wouldnt have been a problem but now I have paid for fire coverage on my own account and then now In XXXX Im paying for fire coverage again for XXXX out of my escrow account? How is this legal after going back and forth with PENNYMAC who was of no help I asked my insurance agent to just send me a copy of my fire insurance from XXXX since PENNYMAC said they would cancel the purchased fire policy for me if I could show proof I had it so I did to avoid my mortgage going up yet again I just did it, but the problem lies with how messed up the company is when it comes to servicing the policy and its insurances/escrow account again I dont even see how its legal for me to have to pay for a policy from XXXX in XXXX because they made a mistake and need to make sure they dont get in trouble in case of an audit! I think this whole company needs to be audited if they can do this to one person who knows how many other people are suffering from this! Now since then I have received multiple letters from them about XXXX in total all dated with in a few days of each other saying they have proof, no they dont need proof thank you for providing, or this is your second notice we need proof a I am so stressed out about this issue its affecting my home life. I have saved all of these letters so that someone can see how unorganized and unprofessional this company is something has to be done about this there is no way I can go through a 30 year mortgage with how many mistakes and stress they have put on me in just XXXX years!