Consumer complaint received 2021-09-27
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: PENNYMAC LOAN SERVICES, LLC. (VA)

I am submitting a complaint because the mortgage servicer, PennyMac, failed to make a payment on our long-held, established comprehensive liability insurance policy. The mortgage service then, without notice to me, obtained forced-place insurance at a higher premium ( {$710.00} ) and for less coverage than our existing policy that it failed to pay. We learned of this mistake when there was a water leak in our unit that caused almost {$690.00} in damage to the unit below. We attempted to make an insurance claim but learned there was no policy in place. We had to pay the full amount as the forced-place policy would not cover the damage. This damage would have been covered by the policy that we had in place before the mortgage servicer failed to make timely payments. 

This appears to violate the mortgage servicing requirement of Regulation X and specifically 12 CFR 1024.17 ( requiring timely escrow payments ) and 12 CFR 1024.37 ( b ), limiting forced-place insurance. I am seeking : ( 1 ) {$710.00} cover the higher premium of the forced-place insurance ; ( 2 ) payment of {$690.00} for the damage not covered by the forced-place insurance ; and ( 3 ) for the servicer to correctly make the payments to our prior XXXX insurance policy ( approx {$600.00} ). 



The following is a summary of what happened XX/XX/XXXX : Refi loan was obtained for the property, XXXX XXXX XXXX XXXX XXXX, VA XXXX through XXXX  XXXX/XXXX  XXXX  Loan # XXXX ) ( Contact information : XXXX XXXX , NMLS : XXXX ; Phone : XXXX ). Note that at this time, the XXXX insurance policy # XXXX XXXX XXXX XXXX XXXX was effective and in place and was being paid through escrow. 

XXXX, XXXX : On or about this month, the loan was sold and management of the loan was transferred to PennyMac. Notice was sent to us indicating that all terms of the loan would remain the same. Presumably, this included ongoing payment through escrow for the insurance policy in place at the time. 

XX/XX/XXXX : The aforementioned insurance policy was allowed to lapse. We were given no notice of this by PennyMac ( or XXXX for that matter ). 

XX/XX/XXXX : Notice arrived via e-mail saying that the aforementioned insurance policy had been cancelled for non-payment. 

XX/XX/XXXX ( date uncertain ) : I called the insurance company to inquire about why/how the insurance policy had been allowed to lapse. I was told that no payment had been received. When I inquired further, I was told that XXXX had been trying to bill the previous mortgage holder ( XXXX  ) for the premium. I directed them to try to collect payment from our current lender instead. ( Note : It remains unclear whether XXXX followed up on this request, but I do not believe that issue is relevant with respect to this complaint, which is about the mortgage companys failure to pay the premium and/or alert travelers to the change in mortgage ownership in the first place ). 

XX/XX/XXXX : A valve in the dishwasher in our rental unit ( XXXX XXXX XXXX XXXX ) failed, resulting in a leak significant enough that water seeped through into the unit below, XXXX XXXX XXXX XXXX. The damage resulted in the need to replace and repaint parts of the units kitchen ceiling ( see attached photographs ). Total cost for ceiling repair was {$690.00} ( See attached receipt ). Any and all of the details of the flood can be verified by the property manager for XXXX  XXXX, XXXX XXXX. Contact information : XXXX XXXX, XXXX. 

XX/XX/XXXX : I paid the contractor the {$690.00} due for work done to repair/repaint XXXX ceiling. 


Other important notes : Per XXXX on XX/XX/XXXX at the XXXX Insurance Agency, ( XXXX XXXX ), PennyMac has been billed 3x by XXXX ( starting in XXXX ) but has not paid the bill for policy # XXXX XXXX XXXX. Per XXXX at PennyMac on XX/XX/XXXX, a different Travelers policy that we never asked for which is roughly {$110.00} more expensive than our original policy and offers less coverage ( policy XXXX ) and FOR WHICH WE HAVE NEVER RECEIVED DOCUMENTATION is in place. I have been unable to obtain ANY documentation about this policy or when it was placed despite a half dozen attempts with XXXX and PennyMac contacts.