Consumer complaint received 2026-01-01 00:00:00
Product: Mortgage — VA 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: WA

Complaint narrative:
In 2025, my husband and I faced severe financial hardship due to his XXXX XXXXXXXX. We were granted a loan modification with PennyMac, under which we paid slightly reduced amounts while the remainder of the balance was added to the end of the loan. All payments were made on time. 

In XX/XX/year>, because of the hardship my family was experiencing, I simply asked in an email to PennyMac whether other options such as short sale or deed in lieu were available. Immediately after this straightforward inquiry, PennyMac abruptly terminated our loan modification agreement without warning or explanation and began collections and foreclosure proceedings. Asking a simple question should never result in ending an important agreement that we relied upon to manage a severe hardship.

I explained to the PennyMac representative that we were considering selling the property, but with all of these things in combination, the balance due after the abrupt termination of the payment plan, increasing HOA fees, and not having time because my husband is at the end of his life, we had no realistic opportunity to sell the home to preserve our equity or protect our life savings. Since collections started so abruptly after ending the payment plan, we had no time to sell the home and I had to act quickly. Forced into a corner, we decided to do a deed in lieu. We submitted all required information to complete the application, and it was under review.

We submitted all documents for a deed in lieu on time, but PennyMac continued foreclosure activity, including posting a sale date, and stalled processing the title report required to complete the deed-in-lieu review. I contacted a supervisor in the deed in lieu department on XX/XX/year> to inquire why foreclosure was still proceeding despite our application ; he responded on XX/XX/year> that foreclosure would continue while the deed-in-lieu review was underway. 

On XX/XX/year>, I called with a HUD-approved housing counselor, and we were misinformed that mediation would not stop foreclosure, which caused me to miss critical deadlines. On XX/XX/year>, a P

ennyMac representative admitted she did not know why the sale date was posted, confirmed foreclosure was continuing despite active review, and escalated the matter for explanation. The call also illustrated PennyMacs repeated failure to provide a consistent point of contact.

PennyMacs actions violate Washington law ( XXXX  XXXX ) by : Ending a loan modification after a simple inquiry, without considering loss mitigation options. 

Engaging in dual tracking by continuing foreclosure while a deed-in-lieu application was under review. 

Failing to assign a consistent, authorized point of contact. 

Providing false or misleading information about foreclosure procedures, interfering with our ability to meet deadlines. 

Failing to make timely determinations, including stalling the title report needed for the deed-in-lieu. 

These actions caused significant harm, placing our home, life savings, and financial stability at risk during a period of serious personal hardship, despite our full cooperation and timely submission of required documentation.

Company response to consumer: Closed with non-monetary relief