Consumer complaint received 2015-08-11
Product: Mortgage — VA mortgage
Issue: Loan servicing, payments, escrow account — 
Company: PENNYMAC LOAN SERVICES, LLC. (IN)

On XX/XX/2015 we had black water damage to the interior of our home, due to septic pump failure caused by lightning. We had to utilize plumbing, septic, and mitigation services immediately to eradicate affected materials to make our home safe. We filed an insurance claim that day XX/XX/2015. The insurance adj came to our home on XX/XX/2015 and wrote an estimate for repair costs not including the costs for services already completed. This estimate totaled {$10000.00}. The adjustor then gave us a check for {$6100.00} and had Penny Mac listed on the check. He then explained that Penny Mac requires this if the damage exceeds {$7000.00}. I then contacted Penny Mac for instructions. After receiving instructions, I emailed all documents and then priority mailed affidavit and check on XX/XX/2015. According to the USPS, this package was delivered to Penny Mac Loan Services, Loss Draft Department XXXX XXXX XXXX, XXXX XXXX, TX on XX/XX/2015. I then gathered XXXX estimates for repairs and submitted them and the contractor contract to Penny Mac according to instructions for receipt of first disbursement. Throughout this process I contacted Penny Mac verifying receipt of documents and asking for updates on disbursement. On XX/XX/2015 I sent Penny Mac a XXXX check from XXXX XXXX for {$5200.00} for services already completed ( mitigation, plumbing, and septic ). I then contacted them on XX/XX/2015 to confirm the receipt of this check, and check on the disbursement check I had not received. I was then told they were only sending me {$2000.00} of the {$6100.00} XXXX check received. I was shocked and asked them how they were able to determine that amount when the cost of the replacement flooring exceeded {$2000.00}. I was not given a reasonable explanation, and was just told that was their policy and if I needed more funds to send invoices for materials. I then sent invoices for vinyl flooring and re-referenced both estimates I sent. I then explained that type of disbursement schedule would not be acceptable for getting the job started, and for the second check sent for {$5.00}, XXXX since this was payment from the insurance company for services already completed. I finally received the XXXX disbursement for {$2000.00} on XX/XX/2015 and called Penny Mac to confirm the receipt of the second check and confirm that they would not hold those funds since it was for services completed over a month ago. I have been receiving invoices requesting payment from these providers. I was on the phone with Penny Mac for two hours trying to explain my situation, and I was placed on hold for collectively an hour while the rep was trying to speak with supervisors and account managers, neither would speak with me directly. They stated this was their policy and would not release any additional funds until all work is completed. They have not processed these funds timely, and have an unreasonable policy in place. I feel there is an integrity issue at play, hiding behind this policy. I have personally paid roughly {$1800.00} of my own personal funds to keep the repairs active to purchase materials since Penny Mac has not sent me sufficient funds to have the repairs started. If Penny Mac 's primary concern is with the repairs being completed, why would they not release enough funds to even purchase the materials? I do not feel Penny Mac has my property interest at heart and are stating claim to funds that are not theirs. I signed an affidavit stating these repairs would be completed with funds submitted by the insurance company, but am not being allowed due to this unrealistic disbursement schedule. Having this notarized affidavit, Penny Mac should allow disbursements based on legal responsibility of the mortgagee. By not submitting disbursements timely and in reasonable amounts they are leaving me vulnerable to legal action by service providers and breach of the affidavit they required me to sign