Consumer complaint received 2026-04-11 00:00:00
Product: Mortgage — VA mortgage
Issue: Closing on a mortgage — Trying to communicate with the company to fix an issue with the loan closing
Company: PENNYMAC LOAN SERVICES, LLC.
State: FL

Complaint narrative:
I am a XXXX XXXX veteran who served from XXXX to XXXX in support of XXXX XXXX XXXX and XXXX XXXX XXXX In XXXX, I purchased my home in XXXX XXXX, FL using my VA home loan entitlement. In XX/XX/XXXX, PennyMac Loan Services, a VA-approved lender, closed a VA Interest Rate Reduction Refinance Loan ( IRRRL ) on this property. PennyMac violated the following VA regulations and federal statutes during the origination and closing of this loan : VA Lender 's Handbook ( Pamphlet 26-7 ), Chapter 6 : requires IRRRL submission through the VA 's XXXX system. PennyMac never submitted this loan through XXXX. Instead, PennyMac recycled an abandoned VA case number that belonged to a prior, never-completed loan application for a completely different property. No VA guaranty was ever requested or obtained. VA XXXX XXXX : requires lenders to use XXXX for IRRRL processing. PennyMac bypassed XXXX entirely. 38 USC 3703 ( c ) ( 1 ) : a VA guaranty is issued only after proper application through VA systems. No application was ever made for this loan. 38 CFR 36.4306 : a VA funding fee may only be collected on a VA-guaranteed loan. PennyMac collected a {$1000.00} funding fee for a guaranty that does not exist. 38 CFR 36.4307 : an IRRRL must meet the 36-month recoupment test. The actual recoupment period on this loan was 46.1 months. VA Lender 's Handbook Chapter 6 : an IRRRL must refinance the same veteran 's existing VA loan. There is no provision in VA regulations authorizing a lender to swap one veteran 's entitlement for another or to remove the entitled veteran from the note and substitute a different borrower. PennyMac removed me, the veteran whose entitlement backed the original loan, and made my then-spouse the sole borrower on the refinance. PennyMac never verified which veteran 's entitlement backed the original XXXX VA purchase mortgage before closing this IRRRL. RESPA 12 U.S.C. 2605 ( e ) : PennyMac failed to acknowledge or respond to a Qualified Written Request within the statutory deadlines. PennyMac 's own closing documents, including the closing disclosure, the recorded mortgage, and the promissory note, all identify this as a VA loan. These documents were recorded in XXXX XXXX public records. PennyMac documented and certified a VA loan that it never submitted to the VA. The mortgage PennyMac recorded in XXXX XXXX lists both me and my then-spouse as grantors, but the promissory note names only my then-spouse as borrower. PennyMac created and recorded documents that contradict each other. No modifications, corrections, or amendments to this mortgage have ever been recorded. The only document in the XXXX XXXX public record is a mortgage identifying itself as a VA-guaranteed loan that does not exist in the VA 's system. PennyMac sold this unguaranteed loan to a private investor in the fourth quarter of XXXX. I discovered something was wrong in XX/XX/XXXX when I attempted to complete what should have been a routine {$50.00} VA spousal transfer following my divorce. Because the original loan was backed by my own VA entitlement, I had no reason to expect any issues with this process. The servicer forwarded a XX/XX/XXXX VA letter indicating the guaranty had not been finalized. On XX/XX/XXXX, the servicer told me in writing that it could not process a VA assumption and directed me back to PennyMac, stating I would need to " see if the VA can be completed through Pennymac. '' On XX/XX/XXXX, the servicer again confirmed it could not finalize any VA process and directed me to PennyMac. When PennyMac was notified of the defect in the fall of XXXX, PennyMac treated this as new information. PennyMac 's own internal processes had never flagged that this loan was closed without a VA guaranty. It was not until I initiated my own research and contacted PennyMac through the servicer and the originating broker that anyone at PennyMac became aware that the loan had never been submitted to the VA. On XX/XX/XXXX, a VP in PennyMac 's Assumption Division left a recorded voicemail acknowledging the loan defect. Despite this acknowledgment, PennyMac has taken no corrective action in the two and a half years since. On XX/XX/XXXX, I sent PennyMac a Qualified Written Request via Certified Mail, delivered XX/XX/XXXX. PennyMac never acknowledged the request and has provided no response as of today. The 5-business-day acknowledgment deadline passed on XX/XX/XXXX. The 30-business-day substantive response deadline passed on XX/XX/XXXX. PennyMac is now over five weeks past the response deadline with no communication of any kind. On XX/XX/XXXX, the VA confirmed in writing that no guaranty exists for this loan. On XX/XX/XXXX, the VA XXXX XXXX XXXX XXXX XXXX verbally confirmed that PennyMac recycled the abandoned case number from a different property and never submitted the XXXX IRRRL through the VA 's system. The VA itself directed me to file a complaint with the CFPB against the lender. Because XXXXennyMac removed me from the note, all mortgage interest and property tax payments are reported to the IRS under the sole borrower 's SSN, denying me tax deductions I have funded since XX/XX/XXXX. All credit reporting flows exclusively to the sole borrower despite the fact that I have made every payment for over three years, totaling over {$70000.00} on a loan that has no VA guaranty and that I am not on the note for. My VA entitlement remains trapped. The loan can not be assumed through VA channels because no guaranty exists. My 2.25 % interest rate loan has lost its VA assumability in a 7 % rate environment. On XX/XX/XXXX, the servicer 's attorney sent me a formal Notice of Attempt to Collect Debt for {$180000.00} on a loan I am current on and not even on the note for. PennyMac 's failure to respond to my QWR left its downstream servicer to act, and that servicer responded with a debt collection letter instead of the requested documents. I am now facing debt collection as a direct result of PennyMac 's origination failures.

Company response to consumer: Closed with explanation