Consumer complaint received 2026-04-24 00:00:00
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — An existing modification, forbearance plan, short sale, or other loss mitigation relief
Company: PENNYMAC LOAN SERVICES, LLC.
State: VA

Complaint narrative:
To Whom It May Concern, I am writing to formally dispute the handling of my FHA-insured mortgage loan and to request immediate corrective review. Before PennyMac solicited me for a QRPC interview, trial payment plan, or any other workout discussion, PennyMac was required to first evaluate my loan in accordance with FHA loss mitigation requirements. That did not occur. At the time PennyMac contacted me, I was on approved XXXX XXXX leave and experiencing a temporary loss of income. I remained employed and expected to return to work. This was a temporary hardship situation, not a permanent inability to pay. Under Federal Housing Administration servicing requirements, borrowers facing temporary hardship must be reviewed through the FHA loss mitigation waterfall in the required order, including appropriate retention options such as forbearance or other temporary relief before moving to more permanent or non-retention outcomes. Instead, PennyMac proceeded with solicitation efforts and later verbally stated that I did not qualify for a modification, while suggesting a short sale. No written denial, no written explanation, and no documentation of the review was ever provided. This raises serious compliance concerns under FHA servicing rules and federal mortgage servicing standards, including 12 CFR 1024.41, which requires servicers to exercise reasonable diligence and provide proper written notices regarding loss mitigation decisions. My concerns are straightforward : - PennyMac should have reviewed my account under the FHA hierarchy before initiating QRPC solicitation. - My XXXX leave should have been recognized as a temporary hardship requiring review for forbearance or short-term retention assistance. - Suggesting a short sale before exhausting applicable FHA retention options was improper. - Verbal statements without written notice do not satisfy required servicing standards. - My income during protected medical leave did not reflect my normal earning capacity and should not have been treated as permanent. Now that I have returned to work, my financial circumstances have changed and must be evaluated using current verified income. I am demanding the following : 1. A full written explanation of every FHA loss mitigation option reviewed and the order reviewed. 2. Copies of all call notes, QRPC records, affordability calculations, and internal decision documentation. 3. Explanation for why no written denial or decision letter was sent. 4. Immediate re-evaluation using my current post-leave income. 5. Written confirmation that PennyMac is complying with FHA Handbook 4000.1 and applicable federal servicing regulations. I expect a prompt and substantive written response. If these issues are not corrected, I reserve the right to escalate this matter to the Consumer Financial Protection Bureau, U.S. Department of Housing and Urban Development, and any other appropriate regulatory agencies. Sincerely, XXXX XXXX XXXX

Company response to consumer: Closed with explanation