Consumer complaint received 2021-02-12
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: PENNYMAC LOAN SERVICES, LLC. (GA)

On XX/XX/XXXX I closed on a loan with XXXX XXXX  to finance my new home. Within 2 weeks, on XX/XX/XXXX, XXXX sold my loan to PennyMac Mortgage service. On XX/XX/XXXX I received a letter from PennyMac dated XX/XX/XXXX stating that my standard homeowners insurance policy did not cover wind and hail damage and I would be required to get this coverage and if didn't get the coverage that PennyMac would purchase the coverage at substantially higher cost. No date as to when that coverage would take effect. I called PennyMac the day I received the letter to get clarification and find out how much time I had to purchase new coverage. I was informed to act right away, but that PennyMac usually won't purchase coverage for at least 45 days from date of notification. I immediately got in touch with my insurance company XXXX to purchase this coverage and was informed that XXXX doesn't offer that coverage and they referred me to XXXX XXXX XXXX agency which I purchased the policy from. A wind and hail policy was issued on XX/XX/XXXX, which I paid for in full in the amount of {$1000.00}. On XX/XX/XXXX PennyMac Mortgage debited my escrow account an additional {$370.00} to pay for a lapse in coverage from the day they purchased my loan ( XX/XX/XXXX ) to the day my new policy went into effect ( XX/XX/XXXX ). PennyMac backdated this charge from the date they purchased the loan, not the date they notified me, nor the date of my new policy taking effect. 
When PennyMac purchased the loan they purchase the terms of the loan. In this case my insurance met all underwriting requirements with XXXX XXXX. 
PennyMac debited my escrow account {$370.00} back dated to a date before I was even informed my loan was sold. This resulted in a negative balance in my account. I'm sure this can also raise my monthly payment. At a minimum, the date should be from the date of notification that the policy did not meet PennyMac standards. If there was an oversight in the underwriting process at XXXX XXXX  during the approval process, PennyMac should make a claim to XXXX XXXX. They are required to carry error and omissions insurance. 
PennyMac has suffered no financial loss. This is a brand new house and I have not filed any claims of any kind. I believe it is illegal to change the terms of the mortgage agreement they purchased. While I don't mind complying with this requirement because i think it's good coverage to have, I do have a problem with PennyMac charging me an insurance charge backdated to a date well before I was notified of their requirement. I was not notified when this charge to my escrow account would be made, nor who this payment was actually paid to or what insurance company they selected or how they arrived at that amount even though I complied immediately when I received notification that wind and hail coverage would be required. I only found out about the actual debit when I logged into my account to make a payment. 
Wind and Hail coverage was not a requirement with the mortgage company I closed the loan with. I had no reason to believe that I would need any further coverage or additional would be needed if and when the loan was sold. I'm not an insurance agent and I have been insured with XXXX for 38 years so I did not no they didn't offer wind and hail coverage in that area or that there was any such requirement because XXXX  XXXX never required it. I've gone over my entire loan closing package and there is no such disclosure. The policy I bought and provided to XXXX XXXX  during the closing process met all underwriting requirements, otherwise the loan would not have closed. If there was such a requirement XXXX XXXX would have notified me during the approval process and this could have been easily resolved before closing. 
Please note that there is no way I could provide proof of wind and hail coverage on XX/XX/XXXX if I wasn't notified of the need for this additional coverage above and beyond my standard homeowners policy until a letter dated XX/XX/XXXX. My standard homeowners policy went into effect on XX/XX/XXXX. 
When I closed on this loan there is no way I could no exactly when or to whom they would sell the loan to. I do know it is illegal for the new mortgage company to unilaterally change the loan requirements and backdate that requirement to the date of purchase. In this case, PennyMac could have purchased this loan years later from XXXX and back billed me for insurance that wasn't required at closing at some arbitrary rate and potentially pushed me into foreclosure if I couldn't pay the amount. 
I've tried to resolve this matter with PennyMac over the phone on XX/XX/XXXX and again on XX/XX/XXXX but to no avail. 
I am requesting a refund in the amount of {$370.00}. PennyMAc has in its possession my insurance policy that meets their requirements which I purchased immediately upon being notified even though this was not a requirement when I closed on the loan and PennyMac has not suffered any financial loss.