Consumer complaint received 2022-09-30
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: PNC Bank N.A. (GA)

FHFA OMBUDSMAN COMPLAINT Department Of Housing And Urban Development Office Of Fair Housing Equal Opportunity XXXX XXXX XXXX, XXXX Washington XXXX DC XXXX Federal Housing Finance Agency ( FHFA ) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Washington XXXX DC XXXX Federal Deposit Insurance Corporation XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX  XXXX XXXX XXXXXXXX, MO XXXX RE : PNC XXXX XXXX XXXX XXXX  UNDERWRITING Dear Friend : PNC Bank, XXXX Mortgage and other mortgage loan underwriters practice a systematic process of inflicting unnecessary financial hardships of Primary Mortgage Insurance on XXXX XXXX, XXXX XXXX and other borrowers. 

In underwriting my mortgage XXXX Mortgage failed to present PMI under writing or disclose the 40 % monthly payment economic burden : Here are the three most common options not disclose : Up-front Homeowners can elect to pay the PMI premium up-front as part of the closing costs, and they no longer have to worry about it. 
Monthly premiums A homeowner can also choose to pay for PMI via monthly premiums. In this case, the premium will be added to their mortgage payment. This is the most common way to pay for PMI. 
Up-front and monthly premiums The buyer can also choose to pay part of the PMI upfront and then pay the remaining balance as a monthly Again, current mortgage is a prime example. Mr. current monthly Principal and Interest is {$1300.00}. My primary mortgage payment is {$500.00}. Hence, my PMI is approximately 40 % of my monthly housing burden. I require clarification on whether to PMI was underwritten at the of origination by XXXX mortgage or place on the mortgage at the point of servicing transfer. 

When I approached PNC to remove the PMI I was informed that there was a policy stating that a home buyer must wait for 24 months. This was despite the fact that home valuations had increase and my effective loan to value was 70 %. There have been no late payments. 

PNC has refused to practice moral corporate governance and responsibility to move the mortgage market into a more market risk based model. 

MOVING FORWARD PNC as a market leader must continue is innovative leadership and lead the mortgage market with reforms in mortgage risk management. First mortgage banks must design a policy and practice of market based mortgage risk analysis. A mortgage loan shall be adjusted to market LOAN TO VALUE on an involuntary basis. Mortgage loans as all risk to must be marked to market annually. How many mortgage loans are PNCs portfolio aged over 2 years that have LOAN TO VALUE RATIOS BELOW 80 % DUE TO AGING BUT CONTINUE TO PAY PMI>? Access to this embedded capital reward banks and provide stimulation to the economy and consumer welfare of America. 

In addition, PMI should be removed immediately from mortgage payments when the borrower communicate a lost of income. Most primary mortgage insurance does not cover lost on income. 

MOVING MORTGAGE FINANCE FROM ASSET BASE FINANCING TO MARKET PRICE CASHFLOW Income is the primary determinate of mortgage default risk. It is important for the borrower to maximize free cash flow in order to execute timely mortgage payments. 

All credit activity must has transition to a cash flow model of risk management. The mortgage LTV model is outdated. It is asset based or collateral based. This a worse case approach. In fact, during the Great Recessions property valuation declines evidenced the fact that cash flow is more important. The ability to pay and willingness to pay is superior relative the LTV model of property or asset sales in a declining or a stable price market. 

LTV @ Default=EaDVaD, where VaD is the value of the property at default, the lower the LTV @ Default ( or, equivalently, the higher the ratio of VaD to EaD ), the more likely the occurrences of case The traditional default remedy estimated cost of 20 % are for : EXPECTED MORTGAG DEFAULT LOSS = Reinvestment Interest Lost, Lost Monthly Principal + And Interest ( 4 months foreclosure and resale ) + Legal Foreclosure Cost Resale Cost. 
None of this cost include 40 % burden of the PMI. PMI XXXX impact on the cashflows to service the loan results in approving an effective +100 % LTV. 
All of these costs are conditional similar to eventual liquidation market price. 

I look forward to PNC taking the lead in moving the market to a market mortgage risk model Sincerely, XXXX XXXX, XXXX