Consumer complaint received 2024-10-22
Product: Mortgage — VA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Changes in loan terms during the application process
Company: PENNYMAC LOAN SERVICES, LLC. (TX)

On XX/XX/year>, PennyMac reached out to me regarding a potential refinance opportunity using the XXXX  XXXX that incurred no out-of-pocket expenses and all refinancing costs could be rolled into the loan. I discussed the issue with XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX  ) of Pennymac loan services at that time and declined to process an application because I wanted to wait on the results of the XXXX interest rate discussion. The meeting occurred as scheduled and the Federal Reserve adjusted the target interest rate policy down by XXXX %. XXXX had told me that the market and Pennymac had already " priced in '' the interest rate reductions so if I didn't refinance now, then I would miss an opportunity to refinance at a lower rate and the rates could go up between now and when I close on a refinance loan. Still, I declined to process the refinance initially. On XX/XX/XXXX, I received a letter from XXXX XXXX XXXX XXXX XXXX XXXX Pennymac ( Reservation # XXXX ) that if I called Pennymac by XX/XX/year>, then I could refinance my current 6 % loan to 4.625 % and save {$440.00} per month on my mortgage payment just by refinancing. I found this to be a significant reduction and an excellent offer, so I reached out to Pennymac using the main line. I was received by XXXX of XXXX 's colleagues who then transferred me to XXXX. I told XXXX about the letter I received, and he said that we could start the application, perform a " soft credit pull '' that would not affect my credit score, and find out what interest rate I could get. I inquired again about out-of-pocket costs and rolling loan costs into the loan, and I was assured that there would be no out-of-pocket costs. So I consented to a soft credit pull. XXXX came back to me and told me the best he would do is 5.5 % interest rate even though the letter stated 4.625 %. I asked him why the difference and that a half-percent reduction is not worth refinancing, he stated that with a VA IRXXXX XXXX XXXX would recoup the closing costs within 36 months. I inquired if he meant I'd break even in 3 years and what that would actually do for me over the long- and short-term. Multiple times I asked him about the 4.625 % rate the letter said I could receive and XXXX said, " We've never offered a rate that low in recent history. At least not since XXXX. '' I asked why Pennymac would send out a letter attesting to the fact. He said he didn't know, but he would see what he could do to get the rate lower. After a XXXX hold with the same agonizing, repetitive, mind-numbing music that borders on torture, XXXX finally came back and said he had to jump through a lot of hoops to get me down to a 5.25 % rate. He stated multiple times how the bank was either going to lose money off me or not make money off me- when in reality- they're charging me interest for XXXX years, so they would stand to make over {$500000.00} in interest off me. We had a discussion about this and I questioned multiple times over the next XXXX or so minutes why they can't just give me the rate as offered to me in the letter. He said he can't. I felt backed into a corner given his persistence and insistence that rates are uncertain and I needed to lock them in sooner rather than later or they could end up costing more. I told him I needed time to run an amortization calculator and see if it would be financially beneficial to me in the short, medium, and long-term. My considerations were " Sure, it would be nice to get a lower monthly payment, but I see they're giving me a higher refinance loan amount than my original mortgage. How would this affect me with regard to long-term costs? What is the catch because banks do not lend money at fair terms out of the goodness of their hearts. '' So XXXX and I discussed the issue for a few days and on XX/XX/XXXX, we started the paperwork. On the XXXX, I began signing disclosures and completed them before the market opened the following Monday. I called XXXX XXXX morning to confirm I had signed everything and to talk about next steps. I had reviewed the initial closing disclosure and saw that they had given me an {$8500.00} lender credit that XXXX said was a requirement by the XXXX XXXXXXXX. There were some out-of-pocket costs ( Approximately {$640.00} ), which at the time seemed like a manageable amount regardless of XXXX assuring me that there would be XXXX out-of-pocket costs. However, immediately after I signed the paperwork, and the market opened on XX/XX/XXXX, I received a revised closing disclosure that had removed the {$8500.00} in lender credits and increased my Cash to Close from {$640.00} to {$9000.00}. This is a gross misrepresentation of the confirmation that there would be no out-of-pocket costs on a XXXX refinance. So I was told I could get a rate of 4.625 % and that turned out to not be true. Then I was told there would be no out-of-pocket costs. That was not true. I was told the bank was losing money off my loan. That was not true. I was given what appeared to the amateur to be a XXXXcompliant interest rate reduction, but then that also turned out to not be true.