Consumer complaint received 2025-12-26 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Payment process
Company: PENNYMAC LOAN SERVICES, LLC.
State: VA

Complaint narrative:
Purpose of This Escalation This submission is to supplement and escalate my existing CFPB complaint following PennyMac Loan Services, LLCs written response dated XX/XX/year>, which fails to reconcile its servicing actions with its own forbearance documents, VA servicing requirements, and federal mortgage-servicing law. 

I am attaching PennyMacs response letter and request CFPB review of the issues outlined below. 

Key Facts PennyMac Admits in Writing In its response, PennyMac expressly admits : I was approved for a Special Forbearance Plan due to a federal government shutdown, a temporary and involuntary hardship. 

The forbearance temporarily suspended payments through XX/XX/year>, and was later extended through XX/XX/year>. 

PennyMacs approval letter stated that post-forbearance resolution would occur through reinstatement, repayment, or loan modification, depending on eligibility. 

I resumed making payments in XX/XX/year>, consistent with PennyMacs written instructions. 

These admissions are undisputed. 

Primary Issues Requiring CFPB Review 1. Improper Retroactive Treatment of Approved Forbearance Months Despite approving a payment suspension through XX/XX/year>, PennyMac later : Treated XXXX and XX/XX/year> as ordinary missed payments Applied my XXXX payment retroactively to XXXX Asserted that XXXX and XXXX payments were both due This is inconsistent with PennyMacs own plan terms and raises concerns under 12 CFR 1024.35 ( b ) ( 1 ) ( payment application errors ). 

2. Unsupported Denial of VA-Compliant Payment Deferral PennyMac states : Pennymac is unable to offer a payment deferral on loans insured by the Department of Veterans Affairs ( VA ) XXXX 

However : PennyMac does not cite any VA statute, regulation, XXXX, XXXX provision, or XXXX XXXX servicing authority supporting this assertion. 

PennyMac does not explain why a temporary hardship caused by a government shutdown can not be resolved through a deferred-balance or equivalent VA-compliant loss-mitigation option. 

The denial is presented as a conclusion, not a determination supported by governing authority. 

Under 12 CFR 1024.41, servicers must properly evaluate all available loss-mitigation options and apply investor/insurer guidelines correctly. A bare statement that an option is not available, without authority, does not satisfy this requirement. 

3. Steering Toward Adverse Modification Despite Temporary Hardship PennyMac acknowledges that : I was offered a loan modification that increased the interest rate, increased the monthly payment, and extended the loan term from 30 to 40 years I declined this modification due to the adverse and unnecessary change in loan terms I did not claim an affordability hardship. The hardship was temporary and resolved. Steering a borrower toward a permanent, higher-cost modification under these circumstances raises concerns under RESPA loss-mitigation standards. 

4. Continued Assertion of Delinquency During Active Disputes At the time PennyMac asserted delinquency : A CFPB complaint was pending A XXXX XXXXXXXX XXXX XXXX inquiry was pending A XXXX  Notice of Error had been submitted A formal dispute of the alleged delinquency had been made in writing Despite this, PennyMac continued to assert that the loan remained delinquent and subject to collection activity.

Company response to consumer: Closed with explanation