Consumer complaint received 2024-01-06
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Private mortgage insurance (PMI)
Company: PENNYMAC LOAN SERVICES, LLC. (PA)

I purchased my house on XXXX XXXX XXXX  for {$410000.00}. The bank 's appraisal was {$440000.00} signifying that I built {$25000.00} equity in addition to the 3 % down payment right away. The purchase price was lower than the actual market price at that time such that the agents suggested selling the house for nearly {$500000.00} which indicates that I reached the 80 % LTV ratio in the same year. Inflation added further to the value of the house ( see the market stats after XX/XX/ ) making me exceed the 80 % LTV ratio in the first year. I confirmed this with agents and applied for PMI removal. Penny Mac replied that they needed me to spend {$5000.00} improvement for my request to be processed or wait until we finish the second year to evaluate the value of the house just based on the Current Value ( no improvement required ). I asked what improvement they would accept but they gave me a vague answer asking me to spend money first and letting them decide if they accept the improvement later. My further inquiries about multiple improvements didn't help. For example, I asked if building a gazebo was acceptable, and they said no. Due to this complication and the wasted time getting me close to two years, I decided to wait until we hit two years and apply based on the Current Value. Once we did, I applied and they said I must meet 75 % LTV ratio. I consulted with agents and they said my house will confidently achieve this requirement. Their estimate of the value of my house, in the least, was nearly {$600000.00}. I applied for PMI removal and they sent an appraiser of their choice. She reported a faulty appraisal with serious errors ( e.g., unseeing a bedroom ). I composed a file listing all errors in the appraisal and asked PennyMac to redo the appraisal. They said we only redo it if there is an error in it and ignored the obvious errors I listed. I felt being a hostage to them and at the mercy of them so I told them I needed help from CFPB. As soon as I said that, they messaged me that they FIXED the appraisal and added a bedroom and solar system to it but that still doesn't change the value! Although this way they admitted that the appraisal had errors to be fixed, they refused to redo it. They asked me to send them 5 comparables instead. I knew this was a game and they are not intending to revise their decision but just to show they did a third review. I knew they would bring excuses to reject my comparables. I asked my agent to provide 5 comparables and I sent them to PennyMac. As expected, they rejected them for two main reasons, distance and different square feet. The comparables are all SMALLER in sqft than my house yet all above {$520000.00}. My comparables are closer to my house than the main comparable used in their faulty appraisal. In a reckless double standard manner, they accepted the comparables in their faulty appraisal but rejected the comparables provided by my agent. I attached all our written conversations ( including a comparison between their comps and my agent 's comps ), and the list of errors in their faulty appraisal as two separate files.

They appraised my house for {$490000.00} while the online tool on their own website estimated the value of my house to be {$530000.00} ( screenshot attached ). I needed a {$500000.00} home value to reach their 75 % LTV expectation meaning that they expected me only {$16000.00} to remove the PMI. All their and my comparables are above XXXX or XXXX. There are only two outlier ones below XXXX. The ones above XXXX are more similar to my house. My house is easily well above XXXX. We are talking about a huge difference between their appraised value ( XXXX ) and the actual value of my house ( say XXXX ) not something small that can fall within a margin of error. It is very fishy that they stick to such an outlier number below but close to the expected $ XXXX. In my latest recorded phone call, they said that they are the ones who decide, and even if the appraiser says that the house is worth $ XXXX, they can say no! 
I really need help from CFPB. I tried hard and spent months of conversations to resolve this with them but didn't work. I feel hostage in their hands. Please help. 
I would gladly provide more information if needed. 
Thank you!