Consumer complaint received 2024-12-11 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: PENNYMAC LOAN SERVICES, LLC.
State: PA

Complaint narrative:
Escrow Errors Summary : 1. PennyMacs erroneous school tax payment of {$2200.00} on XX/XX/XXXX. PennyMac is at fault for this error through their own negligence and is entirely responsible for the amount of {$2200.00}, NOT the customer ( me ). 

a. I am exempted from property taxes due to qualifying for the State of Pennsylvania Disabled Veterans Real Estate Tax Exemption. ( 51 Pa.C.S. 89 ) i. I notified PennyMac of my property tax ( school and municipality taxes ) exemption on XX/XX/XXXX, through their electronic messaging system. On XX/XX/XXXX, PennyMac acknowledged the message and attachments and asked for my consent to do an escrow analysis which I granted. 

ii. On XX/XX/XXXX, PennyMac releases an escrow disclosure statement, and a message notifying the customer of the new document. This document outlines the tax exemptions and provides for a new monthly payment ( without taxes in escrow ) of {$2100.00} versus the old payment ( with taxes in escrow ) of {$2400.00}. 

iii. On XX/XX/XXXX, I paid the monthly morgage amount of {$2400.00} and PennyMac acknowledged such. 

iv. On XX/XX/XXXX, PennyMac deposits {$2000.00} ( of the {$2100.00} escrow total ) into the customers account. PennyMac made another error in this deposit that will be addressed later. 

v. On XX/XX/XXXX, PennyMac erroneously paid a school tax bill of {$2200.00} from the customers escrow account. PennyMac did not ask for my consent or did they notify me of the school tax bill or their intent to pay it, Penny Mac did not inquiry with the XXXX XXXX XXXX XXXX XXXX as to the validity of the bill and/or did not inquiry with the the XXXX XXXX XXXX collector as to the validity of the bill. Further, after XX/XX/XXXX, I contacted PennyMac via phone and inquired about this very situation, in which PennyMac assured me that I was already tax exempt and there was some sort of failsafe. It is foreseeable that a bill may be sent erroneously in the future so how does PennyMac assure PennyMac verifies the tax bill? 

b. The State of Pennsylvania reviews my exemption status every FIVE ( 5 ) years. ( 51 Pa.C.S. 8904 ( 3 ) ). Per the letter and the law above, my exemption status is reviewed every five ( 5 ) years, however, it is unlikely my exemption status will be removed because a new law, 51 Pa. C.S . 9902 ( a ) ( b ). Exclusion, has excluded over half my income. I already qualified for the exemption and now half my income is not included, thus it is very unlikely that I will not be tax exempt in the future. However, PennyMac eludes that the escrow analysis process is something that is on-going, which it is not. Following my XX/XX/XXXX letter to PennyMac, PennyMac responded with this excerpt However, we received the XXXX tax bill from your taxing authority. The School tax bill was paid out on XX/XX/XXXX in the amount of {$2200.00} after the escrow analysis was done. That is the reason why the School tax back into your escrow account. The payment is not changing yet until the next escrow analysis happen again. I have submitted a request to have our Tax Department contact your School Taxing Authority and request the refund for the overpayment. Please note, it can take up to XXXX weeks to receive a refund from your School taxing authority If there should be an analysis it should happen according to the State laws. The customer shall not be held responsible for PennyMacs negligence. 

c. Six weeks from XX/XX/XXXX has passed and there is no refund or a change in my escrow account. Further, under the escrow account, under taxes, there is a schedule for another school tax disbursement. Under taxes Next Disbursement Date XX/XX/XXXX Next Amount Due {$2200.00} This error has to be fixed as soon as possible. 

2. PennyMac did not release all of the escrow funds it should have. PennyMac shall release an additional {$350.00} ( $ XXXX {$250.00} ) from my escrow to me. 

a. PennyMacs reasoning for the escrow amount is to help cover any unexpected increase in taxes and/or insurance, I do not have to pay taxes because of my exemption and I do not pay private mortgage insurance ( PMI ) and I only pay homeowners insurance. Further, the first part of the reasoning is PennyMac escrow disclosure statement PennyMac requires a minimum balance up to one-sixth of the estimated total annual payments from your escrow account. At the time of the dispersal of the {$2000.00}, there was {$100.00} + {$230.00} left in the escrow account from two months of home owners insurance ( monthly payment of {$110.00} ). 

i. I already paid an ENTIRE YEAR of XXXX homeowners insurance to XXXX. Also. {$1400.00} x XXXX ( or XXXX sixth ) = {$230.00}. {$110.00} + {$110.00} = {$230.00}, which is two months of homeowners insurance or on sixth the annual total, which PennyMac already had in escrow. PennyMac already had more than {$230.00}. This bill was {$1400.00} and is the same amount for XXXX. I paid a year in advance for my homeowners insurance, I have no PMI and I have no taxes to pay. Thus, if the PennyMac reasoning for the escrow amount is to help cover any unexpected increase in taxes and/or insurance, then the escrow amount shall not increase. Taxes are XXXX for at least the next 5 years probably longer AND the insurance has already been paid and the next insurance bill wont change. 

ii. The original escrow account amount was {$2100.00}. XXXXennyMac released {$2000.00} to me, leaving {$100.00}. Then I paid {$2400.00} the first month which later changed to {$2100.00}. This is a difference of {$250.00} ( {$2400.00} - {$2100.00} = {$250.00} ). Thus, PennyMac shall release an additional {$350.00} ( $ XXXX {$250.00} = {$350.00} ) to me. 

Please see attached letter with attachments for specific information.

Company response to consumer: Closed with explanation