Consumer complaint received 2026-01-20 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: PENNYMAC LOAN SERVICES, LLC.
State: FL

Complaint narrative:
I am submitting a complaint regarding escrow servicing errors on an FHA mortgage loan serviced by PennyMac Loan Services. 

The issue began after I contacted PennyMac to inquire about my homestead exemption and how it affected my escrow account. Following that inquiry, a PennyMac representative made an escrow adjustment that set the projected property taxes to {$0.00}. This adjustment was made by PennyMac as part of its servicing actions in response to my inquiry. 

In XXXX, PennyMac subsequently issued an escrow refund to me in the approximate amount of {$2000.00}. The refund was calculated, processed, and disbursed by PennyMac based on its escrow analysis at that time. I was not advised that this adjustment or refund was temporary, incorrect, or subject to future repayment, and I relied on PennyMacs servicing actions and communications regarding my escrow.

PennyMac later advised that the escrow adjustment was an error and stated that the representative who made the adjustment is now under critical corrective action. Despite acknowledging this servicing error and taking internal corrective action, PennyMac has refused to credit, absorb, or otherwise correct the resulting escrow shortage on the FHA loan. 

During multiple calls regarding the escrow shortage, PennyMac representatives stated that disclosure language had been read during prior calls and that PennyMac is relying on those disclosures as its protection and justification for denying responsibility. PennyMac also asked whether I still had the refunded escrow funds available and whether those funds could be used to repay the current escrow shortage.

During a separate call with a PennyMac supervisor, I was advised that the escrow reserve requirement and the escrow repayment plan were being removed as a resolution. PennyMac later reversed this position, characterizing the supervisors statements as a miscommunication, and declined to honor the resolution that was communicated. 

PennyMac has further stated that it will not cover or absorb any escrow shortages and will not advance or pay property taxes while the dispute is pending. PennyMac has offered only 48-month or 60-month repayment plans with the escrow reserve set to {$0.00}, which I have not accepted. A loan modification was also suggested ; however, this is not a hardship or inability-to-pay issue, but an escrow servicing dispute. 

As a direct result of the escrow shortage caused by PennyMacs servicing error, the monthly mortgage payment increased from approximately {$1900.00} to nearly {$3500.00}, creating a sudden and substantial payment increase. 

I am disputing liability for the escrow shortage and requesting review of PennyMacs escrow servicing practices, its reliance on disclosure language to deny responsibility after acknowledging internal error, its refusal to correct the loan, and the resulting financial harm. They also said they would not waive any late fee during this time of this open dispute and stated the system automatically generates this.

Company response to consumer: Closed with explanation