Consumer complaint received 2024-12-07 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: PENNYMAC LOAN SERVICES, LLC.
State: CA

Complaint narrative:
Previous mortgage company was XXXX XXXX, owned the contract for 7 years, sold the contract to PennyMac XX/XX/XXXX. 

On XX/XX/XXXX, I received a letter from my newer mortgage company stating their records show my condo unit insurance expired XX/XX/XXXX and will require evidence to show new coverage obtained. My actual Insurance policy didnt fully expire until XX/XX/XXXX. I provided the correct policy information and on XX/XX/XXXX I received a letter from the mortgage company verifying that policy information was received and account updated. However the mortgage company still failed to pay the policy from the escrow account before the expiration on XX/XX/XXXX, resulting in loss of my condo insurance policy, which was never communicated until I received another letter on XX/XX/XXXX stating that my insurance expired and evidence of new coverage will be required, again. 

On XX/XX/XXXX a water leak occurred and damaged my unit, resulting in {$15000.00} worth of damage ( first estimate, no work has yet to be performed ). Drywall, cabinets and flooring had to be removed to fix a riser pipe. The HOAs master insurance covered the pipe and structure repair, however I am left to cover the damage to my own personal property. I called my insurance company only to find out that my policy expired due to non payment, and that they would not reinstate my policy. I called the mortgage company and they informed me to purchase new insurance and that they will have lender placed insurance to cover from XX/XX/XXXX until my new policy takes effect. I shopped for insurance and was unable to receive any policys due to lapse in coverage, a previous claim in the past 7 months prior and the loss of most insurance companies refusing to insure in the state of California.

I called the mortgage company back informing them in my inability to receive insurance. I requested to purchase the lender placed coverage from them on XX/XX/XXXX. I was told that it would be purchased and go into effect on XX/XX/XXXX and will cover from XXXX. I waited the month to make a claim only to find out on XX/XX/XXXX that they didnt not purchase the lender placed coverage as requested and now stated because the HOA has a master policy, they didnt require me to provide insurance with my mortgage. I informed them that the HOAs policy was to cover the structure and not my personal living space. The master policy shows that its all inclusive to the structure, not my personal living space. I even emailed the HOA who verified that I would have a {$25000.00} deductible and that it wouldnt cover anything other than the drywall. 

I called again and was informed that the lender placed wouldnt cover the water damage either and that I should try to purchase government sponsored insurance which is way more expensive and still wouldnt cover any future water damage. I feel like there has been so much negligence on behalf of my new mortgage company and Im getting left to pay for it. My previous mortgage company paid on time without issues for the past 7 years. My insurance covered water damage multiple times in the past 7 years without issue. Now the first year of my new mortgage company owning my contract I lose my policy and stuck with the {$15000.00} bill.

Company response to consumer: Closed with explanation