Consumer complaint received 2020-12-08
Product: Mortgage — FHA mortgage
Issue: Closing on a mortgage — 
Company: PENNYMAC LOAN SERVICES, LLC. (IA)

I had an existing mortgage with PennyMac and decided to sell that home. They wanted to keep me as a customer and the XXXX, XXXX XXXX, sent a pre-approval letter on XX/XX/XXXX for a Fixed FHA loan at 2.5 % interest with a total payment ( including an escrow account ) in the amount of {$1100.00}. The loan was subject to my receiving the proceeds on the sale of my home. The process became difficult at times and my XXXX XXXX XXXX, XXXX XXXX, would have to step in to clarify various issues on both sides. At this point, the process was shifted to XXXX XXXX to collect all the necessary documents and signatures to complete the loan. This became extremely frustrating for me because I was sending everything that was requested, but then I would receive a call that a document hadn't been received or was lost. I sent the majority of the documents 2 to 3 times. I never knew where these documents containing personal and private information ended up. They also used a process called e-Sign for any necessary signatures. There were numerous problems in accessing their system for signing documents so they finally had me take pictures of the requested documents and email them to XXXX. This was a never ending cycle of what seemed to be not only incompetence on the part of XXXX, but a nonchalant attitude and lack of concern for completing the loan process on time as well as for me as a customer. I became highly emotional several times in dealing with PennyMac, particularly with XXXX, to the point that her XXXX stepped in to help the process in forwarding on. The Title Opinion was the final document required and a closing date was set for XXXXXX/XX/XXXX. The sale of my home was also scheduled to close on XXXX XXXXXX/XX/XXXXand it was successfully executed and the proceeds of that sale were in holding for my closing. On approximately XX/XX/XXXXXX/XX/XXXX, I received a call from XXXX stating that everything was ready and we would close on XXXX XXXXXX/XX/XXXX. On XX/XX/XXXXXX/XX/XXXX, I received another call from XXXX stating they had not sent me the Settlement Statement on time and since there was a 3 day waiting period after I signed, the closing date was moved to XX/XX/XXXX. This error caused so many problems including the movers who were already booked for the XXXX and they were unable to switch my move to the XXXX. They were not able to move my storage items until the XXXX and I had to find another moving company that could move me on the XXXX during a very heavy moving season. Fortunately, the buyers for my home were able to wait another day to take possession of my home and XXXX was able to negotiate a rental agreement with the seller of my new home. I had pretty much become a nervous wreck at this point. The final straw came on the XXXX. The movers had arrived at XXXX XXXX and had started loading their trucks when another call cam from XXXX. She informed me that XXXXennyMac was not going to give me a loan! I was in complete shock. She said that the Underwriting Department said that the owner of the home I wanted to buy had transferred the property from his company into his name and put a value of {$120000.00} and then was selling it to me for {$200000.00}. This action made it appear to be a " flip house '' which, under FHA rules, requires a 90 day waiting period before he could sell it. 90 days would be the end of XX/XX/XXXX. PennyMac should have been aware of this situation and looked into what had taken place but they did not bother. In fact the seller had lived in this home since XXXX and an affidavit stating such would have explained the situation. This FHA rule that PennyMac should have known about, but apparently didn't, is the reason they gave for not giving me a loan. I had already sold my home and now there was no loan to buy the home I wanted. At this point I had a complete meltdown. Fortunately, XXXX was able to negotiate a rental agreement for {$1400.00} that would allow me to live in the new house until XX/XX/XXXX. We immediately began looking for a new lender and found XXXX XXXX XXXX XXXX willing to give me a fixed Conventional Loan in record time but at a much higher interest rat of 4.5 % creating a monthly payment of {$1200.00}. This is a difference of {$100.00} per month and {$6800.00} over the life of the mortgage. I requested a letter from PennyMac giving the reason they denied my loan. The letter which was dated XX/XX/XXXX, was sent to me on XX/XX/XXXX, indicating that my credit scores were the reason my loan was denied. The credit report from all XXXX major credit reporting companies was also dated XX/XX/XXXX. Why did I receive that pre-approval letter for {$220000.00} on XX/XX/XXXX if my credit was not good enough? My home was listed on XX/XX/XXXX, both homes were scheduled to close on XX/XX/XXXX, XXXX mine closed but the new house did not. I was left high and dry, Having sold my home, paid multiple movers to move my belongings, paying the seller {$1400.00} for a rental agreement and not calling me until right before the closing appointment to say there would be no loan is just so wrong in so many ways. This whole thing is unbelievable and I wonder, if I had not been a Senior Citizen, would this have happened. For any mortgage company to make this kind of error is completely unacceptable and the extent to which PennyMac lacked integrity and professionalism throughout the entire process should be dealt with severely to ensure they do not inflict this kind of trauma on any other person ( s ) who might seek a mortgage loan through them