Consumer complaint received 2018-05-22
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — 
Company: PENNYMAC LOAN SERVICES, LLC. (TX)

I am a XXXX XXXX Veteran of 23 years with over 30 years of combined federal service. My wife and I just finished building our retirement home with permanent VA financing originally provided by XXXX XXXX XXXX XXXX XXXX On XX/XX/XXXX, before our first monthly payment was due, the loan was transferred to a new Mortgage Servicing Lender ( PennyMac ). 
On XX/XX/XXXX, we received a letter from PennyMac that FEMA had modified the flood maps changing our property from flood zone XXXX  to flood zone XXXX ( Special Flood Hazard Area ). Although to date we have not received any official notification from FEMA of the change, we have been required by PennyMac to purchase flood insurance under threat that they will purchase insurance on our behalf and adjust our monthly mortgage payment accordingly. 
The cost of flood insurance if PennyMac were to purchase it on our behalf was a staggering {$2900.00} per annum while the cost of FEMA insurance is {$450.00} per annum. This is a scam of outrageous proportion and should not per permitted under US law. Several items to consider follow. 
Despite our cooperation, we have been continually harassed by PennyMac who has sent a multitude of threatening letters over a very short period of time. Between the letters and several lengthy phone calls Im still not sure the Lender isnt going to come back with some bogus additional charges. A record of these letters and phone calls is attached as Exhibit A. 
The most egregious issue is the lender wanting to back charge us for flood insurance. The original notification from the lender of the FEMA map change was on a letter dated XX/XX/XXXX. That letter required us to purchase flood insurance within 45 days which we did on XX/XX/XXXX. The insurance was purchased through FEMA which requires a 30 day implementation period from the date of purchase and so it did not become effective until XX/XX/XXXX. Now the lender wants to charge us {$330.00} for the period XX/XX/XXXX to XX/XX/XXXX to purchase flood insurance on our behalf that is not covered under the FEMA policy. This is criminal, who actually sells insurance for a past period of time? Wanting to charge for insurance for a period of time that has already past and should have been covered by the 45 day grace period ( XX/XX/XXXX notification + 45 days = XX/XX/XXXX ). Our FEMA policy became effective XX/XX/XXXX and so was within this 45 day grace period. 
What gives a private corporation ( Lender ) the right to automatically change the terms of a written contract that was sold to them by the previous party to that contract? Where are the protections for the consumer? Apparently the lender is equal to the IRS and is prosecutor, judge and jury? 
Read any reviews of PennyMac on the web and you will find hundreds of frustrated people. Something should be done. In XX/XX/XXXX PennyMac settled a Class Action lawsuit for force-placed insurance on home owners in such a manner that it received an unauthorized benefit or kick back from the insurance companies. Apparently they havent learned their lesson. Perhaps the Consumer Financial Protection Bureau needs to have another look at PennyMac. These are hostile lending practices and this is no way to be treating Veterans.