Consumer complaint received 2022-04-26
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: PENNYMAC LOAN SERVICES, LLC. (MN)

Loan originated in XX/XX/XXXX. First payment was made on XX/XX/XXXX and on time payments have been made every month since. 

PMI was issued for loan based on original loan-to-value. This was paid in full every month. 

Value of home appreciated very quickly based on market conditions. I called my loan servicer, PennyMac, in XXXX of XXXX the appreciated market value of the home rose to a level that would qualify for removal of the PMI relative to the remaining balance on our loan. 

I reached out to PennyMac and requested an appraisal, for which I was charged {$150.00}. They appraiser called and asked me if we had completed any major renovations to the home and used examples of a deck remodel, a renovated kitchen or renovated bathroom. We indicated that we had done some landscaping work, added rock, trees, plants, etc., thought nothing along the lines of the " major renovations '' she had noted, but that we believed that the market value of the home had nonetheless appreciated to a value to qualify for removing PMI. She indicated that unless we had done a " major renovation '', we would not qualify for PMI removal until we had made 24 consecutive payments. They subsequently reimbursed the {$150.00} payment. 

On XX/XX/XXXX, we resubmitted our request to have the PMI removed after completing 24 consecutive on-time payments. 

On XX/XX/XXXX, I was contacted by an appraiser assigned by PennyMac who asked me about any work we had done on the home. I said no major renovations, but that we had made our 24 consecutive payments. He further inquired about any minor projects, to which I informed him that we had done the landscaping work and added trees and plants. He came out to our house on XX/XX/XXXX and completed the appraisal. He suggested we follow up with PennyMac the following week.

I have since followed up with PennyMac twice to inquire about the status of our request. PennyMac indicated that they received the appraisal on XX/XX/XXXX but that it may take up to 60 days to fill the request. This seemed like a very long time to complete a simple math equation ( loan-to-value ratio and verification of 24 on-time payments ), so I contacted the mortgage broker that initiated my loan.

He indicated that there should have been no such requirement to wait 24 months before removal of PMI, so long as the appreciated market value of the home exceed a minimum threshold, so we started asking questions of PennyMac. Thus far, they have told us : 1 ) Loan had to have 24 on-time payments before we could use the appreciated market value of the home against the loan amount to apply for PMI removal. 

2 ) That certain home projects did not qualify for sufficient improvements to the home to qualify for consideration of PMI removal prior to 24 months. We were subsequently told differently, that even smaller projects, so long as they added up to a minimum of {$5000.00} ( PennyMac threshold that was mentioned on XX/XX/XXXX phone call ) would have qualified, including the landscaping work we completed. 

XXXX ) That Fannie Mae services the PMI and is responsible for the timing for cancelling the PMI payments. However, there are PennyMac requirements ( {$5000.00} minimum updates to the home to qualify, minimum 24 months of on-time payments ) that must be met before they would apply to remove the PMI. 

If considerations should have been given to removing the PMI in XX/XX/XXXX, we would have saved over {$850.00} in PMI payments. The delays in allowing us to apply for PMI removal, the roadblocks set up by PennyMac to delay our application process and the additional 60 day waiting period all seem like business practices implemented to increase collection of revenue that helps their bottom line. 

We would consider transferring our mortgage to another lender ; however, with the increase in interest rates since the initiation of our loan, it would cost us far more to refinance with another company, and it seems as if PennyMac realizes that we have no choice but to pay these additional fees and help them improve their bottom line.