Consumer complaint received 2026-04-29 00:00:00
Product: Mortgage — USDA mortgage
Issue: Struggling to pay mortgage — Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure
Company: PENNYMAC LOAN SERVICES, LLC.
State: TX

Complaint narrative:
This complaint includes new information and ongoing conduct not addressed in our prior complaint, including failure to properly investigate our Notice of Error, obstructed loss mitigation, provided contradictory and misleading information, refused payments that would allow us to cure the loan, and is proceeding with foreclosure while holding sufficient insurance proceedscreating an unfair and abusive servicing situation. We have a USDA Guaranteed mortgage serviced by PennyMac. Our home was a total loss due to arson on XX/XX/XXXX. The insurance claim paid approximately {$110000.00}, while our loan balance is approximately {$80000.00}. PennyMac is holding the insurance proceeds but referred the loan to foreclosure on XX/XX/XXXX. PennyMacs actions have prevented us from recovering and have placed us into foreclosure despite the availability of funds and our willingness to resolve the situation. First, PennyMac failed to properly investigate our Notice of Error. They denied our dispute based on a third-party call with our insurance agency, claiming we selected an Actual Cash Value policy. However, we never signed any application or disclosures, and the insurance agency has since admitted in writing there is no signed documentation. PennyMac refuses to provide the call recording they relied on, calling it proprietary, while using it to deny our claim. Second, PennyMac has created impossible conditions that block loss mitigation. Their pre-screening questions when calling in prevent us from even making it to the application requiring repairs to be 90 % complete. Their MAA requires us to certify the property isn't at risk of being condemned preventing us from completing and filing a MAA therefore preventing us from the appeal process. They are holding over {$110000.00} in insurance proceeds but demanding blueprints, and other documentation before releasing fundsdocuments that can not be obtained without access to those funds. Their process effectively prevents us from applying for assistance or rebuilding. While suggesting that we use the insurance funds to pay off the loan to stop the foreclosure. Third, PennyMac has refused to accept our monthly mortgage payments unless we pay the full arrearage upfront. This arrearage accrued during an approved unemployment forbearance plan. By refusing payments, they are preventing us from curing the default while continuing foreclosure. Fourth, PennyMac has provided contradictory and inaccurate information. They have given conflicting statements about insurance requirements, admitted that the debt amount provided to their foreclosure attorney was incorrect, and still have not provided a clear or accurate amount owed. Fifth, PennyMac paid an insurance premium from escrow for a policy that began after the home was already destroyed. No refund has been issued or applied to the loan, and the payoff amounts provided do not reflect this. Overall, PennyMac is proceeding toward foreclosure while holding sufficient insurance funds to satisfy the loan, blocking all reasonable paths to recovery, and relying on inconsistent and unsupported information. Supporting documentation and labeled exhibits are attached. Thank you XXXX XXXX XXXX XXXX XXXX XXXX Email XXXX XXXX

Company response to consumer: Closed with explanation