Consumer complaint received 2026-04-06 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Trying to communicate with the company to fix an issue while managing or servicing your loan
Company: PENNYMAC LOAN SERVICES, LLC.
State: CA

Complaint narrative:
XXXX XXXX XXXX XXXX6\nVia Email, Mail, and CFPB Portal\nPennyMac Loan Services, LLC\nAttn: Priority Complaint Department / RESPA Department\nRe: Loan No. XXXXBorrower: XXXX XXXXFINAL NOTICE RESPA VIOLATIONS, FCRA VIOLATIONS, AND DEMAND FOR RESOLUTION\nDear PennyMac,\nI am in receipt of your correspondence dated XXXX XXXX XXXX which purports to respond to prior communications. However, your response once again fails to address my separate and independent Notice of Error dated XXXX XXXX XXXX and instead improperly reiterates prior conclusions without conducting the reasonable investigation required by federal law. A copy of my XXXX XXXX XXXX Notice of Error is enclosed here as Exhibit A for ease of reference.\nThis letter serves as a FINAL NOTICE of continuing violations and an opportunity to resolve this matter prior to formal legal action.\n\nI. FAILURE TO COMPLY WITH RESPA (12 C.F.R. 1024.35)\nYour XXXX XXXX XXXX correspondence fails to satisfy the requirements of the Real Estate Settlement Procedures Act (RESPA), including but not limited to:\n Failure to conduct a reasonable investigation of the specific errors identified\n Failure to respond to each asserted error in the XXXX XXXX XXXX Notice of Error\n Failure to provide requested servicing records, payment histories, and internal documentation\n Failure to provide a complete escrow analysis\n Failure to provide reporting codes and data furnished to credit agencies and mortgage reporting vendors\nInstead, PennyMac has repeatedly issued form responses referencing earlier correspondence XXXX XXXX XXXX XXXX XXXX, which do not address the expanded and independent issues raised on XXXX XXXX XXXXnThis constitutes a continuing violation of RESPA, including 12 C.F.R. 1024.35(e), and demonstrates a failure to comply with statutory investigation obligations. \nII. FCRA VIOLATIONS INACCURATE AND MISLEADING REPORTING\nPennyMac has also violated its duties as a furnisher under the Fair Credit Reporting Act (15 U.S.C. 1681s-2).\nSpecifically:\n Reporting 120180 days past due during an active forbearance and loss mitigation process\n Creating a materially misleading impression of nonpayment despite borrower participation in an approved plan\n Failing to correct such reporting after receiving multiple disputes and documentation\n Verifying the reporting as accurate to consumer reporting agencies, including XXXX, despite later agreeing to delete or suppress the derogatory information\nFederal courts have consistently held that information may be inaccurate under the FCRA if it is misleading in such a way that it can be expected to adversely affect credit decisions (see Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009)).\nYour reporting meets that standard.\nAs reflected in Exhibit A, the XXXX XXXX Notice of Error raised multiple independent issues that have not been addressed in any PennyMac response to date.\n\nIII. DOCUMENTED FINANCIAL HARM (CAUSATION ESTABLISHED)\nAs a direct and proximate result of PennyMacs conduct:\n I was denied or discouraged from proceeding with a streamline refinance\n I was offered materially worse loan terms\n I was required to pay approximately XXXX in upfront costs\n I was unable to remove FHA Mortgage Insurance Premium (MIP), resulting in ongoing monthly losses\n My ability to acquire additional real property (XXXX XXXX purchase) has been negatively impacted\nThis constitutes actual damages under RESPA and FCRA, and may also support statutory and punitive damages.\n\nIV. ESCROW / IMPOUND ACCOUNT VIOLATIONS\nPennyMac has failed to adequately explain or justify:\n A tax advance and escrow charge of approximately XXXX The basis for the alleged shortage\n Whether proper notice and escrow analysis were provided\nFailure to provide accurate escrow accounting and required disclosures constitutes an additional violation of RESPA (12 U.S.C. 2609 and implementing regulations).\nAs reflected in Exhibit A, the March 27 Notice of Error raised multiple independent issues that have not been addressed in any PennyMac response to date.\n\nV. PATTERN OF NONCOMPLIANCE AND UDAAP CONCERNS\nThe repeated issuance of non-responsive, recycled correspondence, combined with:\n failure to clearly communicate servicing consequences\n inconsistent credit reporting positions\n delayed correction after harm\nraises serious concerns under federal consumer protection standards, including unfair, deceptive, or abusive acts or practices (UDAAP).\nAs reflected in Exhibit A, the XXXX XXXX Notice of Error raised multiple independent issues that have not been addressed in any PennyMac response to date.\n\nVI. DEMAND FOR CURE AND RESOLUTION\nTo avoid further escalation, PennyMac must provide the following within fifteen (15) days:\nA complete, RESPA-compliant response addressing each issue raised in the XXXX XXXX XXXX Notice of Error\nWritten confirmation of full correction of all credit reporting acrossXXXX XXXX XXXX XXXX XXXX XXXX, and any other mortgage reporting systems\nA complete escrow analysis, including all calculations, advances, and supporting documentation\nAll servicing records relied upon, including call logs, internal notes, and payment history\nIdentification of all reporting codes furnished to consumer and mortgage reporting agencies\n\nVII. OPPORTUNITY TO RESOLVE\nGiven the documented violations and resulting harm, I am willing to resolve this matter without litigation. Resolution may include:\n Assistance in obtaining a refinance at fair and accurate terms\n Correction of all servicing and escrow discrepancies\n Compensation for financial damages incurred\n\nVIII. NOTICE OF INTENT\nIf PennyMac fails to provide a full and compliant response, I will pursue all available remedies, including but not limited to:\n Claims under RESPA (12 U.S.C. 2605)\n Claims under the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.)\n Claims under applicable federal and state consumer protection laws\nThis letter serves as a final opportunity to resolve this matter prior to formal legal proceedings.\n\nSincerelyXXXX XXXX XXXX XXXX XXXX XXXXnExhibit A XXXX XXXX XXXX Notice of Error (Previously Submitted to PennyMac)\nDate: XXXX XXXX XXXXnVia Certified Mail and Secure Message\nPennyMac Loan Services, LLC\nAttn: Customer Research / RESPA / Qualified Written Request\XXXX XXXX XXXX XXXX XXXXRe: SECOND NOTICE OF ERROR AND FORMAL REBUTTAL\nXXXX XXXX XXXXnBorrower: XXXX XXXX\nTo Whom It May Concern:\nThis correspondence constitutes a SECOND NOTICE OF ERROR and formal\nrebuttal under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C.\n2605(e), and Regulation X, 12 C.F.R. 1024.35 and 1024.36.\nThis letter responds to PennyMacs prior correspondence, including your CFPB\nresponse, in which you maintained your position regarding delinquency reporting\nwhile acknowledging that your representative failed to clearly explain the\nconsequences of exiting forbearance and entering loan modification.\nI. FAILURE TO CONDUCT A REASONABLE INVESTIGATION\nPennyMacs response fails to satisfy its obligations under RESPA.\nYou have not adequately addressed the central error:\n The loan was in active loss mitigation (forbearance followed by loan\nmodification review)\n The transition period between forbearance and modification was\nservicer-controlled\n The reporting of 180 days past due arose during this transition\nSECOND NOTICE OF ERROR AND FORMAL REBUTTAL 1\nYour conclusion that the loan was contractually delinquent does not resolve\nwhether the reporting was accurate, fair, or permissible under applicable servicing\nand credit reporting standards.\nA reasonable investigation requires evaluation of:\n Loss mitigation status\n Payment application during forbearance\n Internal servicing transitions\n Borrower communications\nYour response fails to substantively address these factors.\nI. ADMISSION OF SERVICING COMMUNICATION FAILURE\nPennyMac expressly admitted that its representative:\n did not clearly explain that credit reporting protections would be removed\nThis admission is critical.\nA borrower cannot be penalized with severe derogatory credit reporting based on\nconsequences that were not clearly disclosed, particularly in the context of a\nfederally regulated loss mitigation process.\nThis raises concerns under:\n RESPA (12 U.S.C. 2605)\n Regulation X loss mitigation provisions\n Consumer Financial Protection Act Unfair, Deceptive, or Abusive Acts or\nPractices (UDAAP), 12 U.S.C. 5531\nIII. INACCURATE AND MISLEADING CREDIT REPORTING (FCRA)\nPennyMac is a furnisher of information under the Fair Credit Reporting Act\n(FCRA), 15 U.S.C. 1681s-2.\nSECOND NOTICE OF ERROR AND FORMAL REBUTTAL 2\nThe reporting of 180 days past due is inaccurate and/or materially misleading\nbecause:\n The loan was under an approved forbearance plan\n The borrower complied with all loss mitigation requirements\n The delinquency designation resulted from servicing transition, not missed\npayments\nEven if technically contractual, reporting that creates a misleading impression of\nborrower nonpayment violates FCRA standards requiring accuracy and\ncompleteness.\nThis reporting has already been shown to cause harm in mortgage underwriting.\nIV. DOCUMENTED REFINANCE (STREAMLINE) HARM\nThe inaccurate reporting directly interfered with my ability to obtain a Streamline\nRefinance.\nSpecifically:\n A mortgage credit report (XXXX) reflected severe delinquency\n I was informed that my loan appeared delinquent for an extended period\n I was offered materially worse loan terms\n I was required to pay approximately $6,000 in closing costs\n My expected payment reduction was minimal\n I was advised to delay refinancing\nThis prevented me from:\n lowering my interest rate\n removing Mortgage Insurance Premium (MIP)\n reducing my monthly mortgage obligation\nThis constitutes actual financial harm.\nSECOND NOTICE OF ERROR AND FORMAL REBUTTAL 3\nV. IMPROPER ESCROW / IMPOUND ACCOUNT HANDLING\nSeparate from credit reporting, PennyMacs recent correspondence regarding my\nescrow account raises additional concerns.\nYou:\n advanced property tax payments\n later charged my escrow account $1,306.49\n stated the obligation was not anticipated\nThis indicates:\n potential escrow analysis error\n failure to properly estimate escrow obligations\n inconsistent servicing explanations\nUnder RESPA (12 U.S.C. 2609 and Regulation X), servicers must properly\nmanage escrow accounts and provide accurate analyses.\nVI. DAMAGES AND ONGOING HARM\nAs a direct result of PennyMacs conduct:\n I have incurred increased borrowing costs\n I have been unable to complete a refinance\n My ability to purchase additional property has been impacted\n My credit profile has been materially affected\nThis harm is ongoing.\nVII. REQUIRED ACTIONS\nAccordingly, I demand that PennyMac:\n1. Conduct a new, reasonable, and complete investigation of the disputed\nreporting.\nSECOND NOTICE OF ERROR AND FORMAL REBUTTAL 4\n2. Correct or delete all inaccurate delinquency reporting.\n3. Provide corrected reporting to ALL consumer and mortgage reporting\nrepositories, including:\n XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Provide a written statement confirming that prior derogatory reporting\nresulted from servicing transition issues.\n5. Provide all documents relied upon in your determination, including:\n payment history\n loss mitigation records\n reporting codes submitted\n6. Provide a full escrow analysis and explanation of the XXXX charge.\nVIII. NOTICE OF RIGHTS\nIf this matter is not fully resolved, I reserve all rights under:\n RESPA\n FCRA\n Consumer Financial Protection Act\n Applicable state consumer protection laws\nThis includes the right to pursue claims for actual damages, statutory damages, and\nother relief.\nPlease provide your response within the time frames required by federal law.\nSincerely,\XXXX XXXX

Company response to consumer: Closed with explanation