Consumer complaint received 2026-03-18 00:00:00
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — An existing modification, forbearance plan, short sale, or other loss mitigation relief
Company: PENNYMAC LOAN SERVICES, LLC.
State: CA

Complaint narrative:
b'FORMAL RESPA NOTICE OF ERROR Mortgage Servicing and Credit Reporting Errors \nLoan XXXXTo: PennyMac Loan Services, LLC Attn: Research / Customer Resolution / RESPA Department\nBorrower: XXXX XXXX Loan Number: XXXX Property Address: XXXX XXXX XXXX XXXX CA XXXX\nThis correspondence constitutes a Formal Notice of Error pursuant to the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605(e), and Regulation X, 12 C.F.R. 1024.35.\nI am providing notice of mortgage servicing errors related to the administration of my approved forbearance plan, subsequent loan modification review, and the furnishing of derogatory mortgage credit reporting.\nBackground\nOn XXXX XXXX XXXX I contacted PennyMac requesting mortgage payment assistance. I was approved for a Special Forbearance Plan which reduced my monthly payments. I complied with the hardship plan and was not delinquent prior to entering forbearance, during the forbearance period, or after completion of the loan modification.\nDuring the transition from forbearance to loan modification review, PennyMac furnished mortgage credit reporting indicating that my loan was 180 days or more past due and reflected an extended period of serious delinquency.\nA mortgage underwriting credit report prepared through XXXX XXXX in connection with my application for a XXXX refinance loan reflected that my mortgage account appeared to have approximately one year of late payments. This reporting was relied upon during underwriting and negatively impacted my ability to obtain favorable loan terms.\nAs a result:\n I was advised that I would be required to pay approximately XXXXXXXX in upfront costs to proceed with refinancing\n My projected monthly payment reduction was minimal\n I was advised to delay refinancing for approximately one year XXXX XXXXXXXX XXXX My ability to secure mortgage financing has been harmed\nI am also preparing to purchase an investment rental property in XXXX XXXX and inaccurate mortgage reporting continues to adversely affect my financing opportunities.\nThis recent XXXX refinance attempt represents my third effort to refinance the mortgage loan. Previous attempts were delayed due to factors unrelated to payment performance, including insufficient equity and interest rate considerations. However, during the most recent application, I was informed that adverse mortgage credit reporting specifically the appearance of extended delinquency reflected in mortgage underwriting reports negatively impacted my refinancing eligibility and loan terms. This demonstrates ongoing financial harm resulting from the servicing and credit reporting issues described in this Notice of Error.\nIn addition to the XXXX refinance application described above, I also explored mortgage financing opportunities with other lenders.\nIn XXXX and XXXX XXXX, in addition to the XXXX refinance application described above, I explored mortgage financing opportunities with other lenders. During preliminary underwriting discussions, I was advised that derogatory mortgage credit reporting appearing on my credit history could negatively affect loan eligibility and loan terms. As a result, I elected to suspend those applications pending correction of the inaccurate reporting.\nNotice of Servicing Errors\nThe following servicing errors are asserted:\n1. Improper aging and reporting of mortgage delinquency during the loss mitigation and loan modification transition period.\n2. Failure to clearly communicate the credit reporting consequences associated with exiting the forbearance plan and entering modification review.\n3. Furnishing inaccurate or materially misleading derogatory mortgage credit reporting to consumer credit bureaus and mortgage reporting repositories.\n4. Failure to properly administer loss mitigation timelines resulting in financial harm.\n5. Failure to ensure accurate reporting after completion of the loan modification which brought the loan current.\nRequested Resolution\nI request that PennyMac: XXXX XXXX XXXXn1. Conduct a full investigation into the servicing and credit reporting errors described above.\n2. Correct all derogatory mortgage credit reporting furnished to all consumer credit bureaus and mortgage reporting repositories, including but not limited to XXXX, XXXX, XXXX XXXX XXXX XXXX XXXX, and XXXX XXXXn3. Provide a formal written letter on PennyMac letterhead confirming that prior derogatory mortgage reporting resulted from servicing transition issues and has been corrected.\n4. Provide a complete life-of-loan payment history and transactional ledger.\n5. Provide documentation supporting any determination that the loan was delinquent at any time.\n6. Provide the dates on which correction transmissions were submitted to each reporting agency or repository.\n7. Provide copies of servicing notes, call logs, and policies governing credit reporting during forbearance and loan modification transitions.\nPlease acknowledge receipt of this Notice of Error within five (5) business days and provide a substantive written response within the timeframe required under RESPA and Regulation X.\nFailure to adequately investigate and correct these servicing errors may result in additional regulatory complaints and pursuit of all remedies available under federal and state consumer protection laws.\nSincerely,XXXX XXXX XXXX XXXX XXXX Division Court XXXX XXXX XXXX XXXX

Company response to consumer: Closed with explanation