Consumer complaint received 2025-02-05 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: PENNYMAC LOAN SERVICES, LLC.
State: FL

Complaint narrative:
This a formal complaint against Pennymac Loan Services regarding their refusal to remove the escrow account tied to my mortgage account, despite my meeting all reasonable criteria for escrow waiver. 

Details of the Complaint : Loan origination date : XXXX Original sales price : {$460000.00} Original loan amount : {$430000.00} Mortgage Balance : {$390000.00} Current Property Market Value : Over {$670000.00} ( as per recent market evaluations including Pennymac online estimate ) Current Loan-to-Value ( LTV ) Ratio : Approximately 59 % ( well below the 80 % threshold typically required for escrow removal ) I have been paying my mortgage for four years, with no missed or late payments. I have excellent credit and sufficient income to handle property tax and insurance obligations independently. However, Pennymac denied my request for escrow removal, citing that the minimum LTV requirement was not met, which I believe is inaccurate or miscalculated. 

Attempts to Resolve the Issue : I submitted a request and later an appeal through the Pennymac Message Center in my account, providing evidence of my low LTV ratio, strong payment history, and financial responsibility. Despite this, they refused to reconsider my request and advised me to seek legal counsel.

Concerns and Request for Investigation : I believe that Pennymacs refusal to allow escrow removal may be : 1. Unfair or deceptive It seems like Pennymac is holding me to an older property value rather than a current, accurate one. LTV ratio calculations typically reflect the current market value of the home.

In Florida, there are no state-specific regulations that directly mandate how the LTV ratio must be calculated for escrow impound removal, but the general rule is that the LTV ratio should reflect the current market value of the property. Federal guidelines ( like those from XXXX XXXX  and XXXX XXXX ) suggest that lenders should use the current property value when assessing requests for impound account removal, especially when the borrower is asking to remove PMI or escrow accounts. 

Pennymac claims that their approach aligns with standard industry guidelines and investor policies, including those set by XXXX XXXX and XXXX XXXX. However, I am concerned that that is not true and they may not be following proper procedure. They referred me to the Deed of Trust document, sections 5 and 9. These sections do not refer to escrow accounts. Section 3 does, but it does not specify the terms for escrow waiver 2. Financially burdensome Forcing me to keep an escrow account despite meeting the standard qualifications is an unnecessary restriction. Also, as a result of Pennymac 's collection of escrow funds, I am effectively losing approximately {$500.00} annually in potential interest income if I otherwise keep these funds in a more advantageous account.

3. Non-compliant with consumer rights If Pennymac is improperly calculating LTV or applying arbitrary policies, this could indicate non-compliance with federal mortgage servicing rules.

I respectfully request that the CFPB investigate Pennymacs escrow account practices to ensure they are fairly assessing and processing escrow removal requests in accordance with regulatory guidelines. Additionally, I seek guidance on my rights as a borrower and any available recourse to have my escrow account removed. 

Please let me know if further documentation is required. I appreciate your time and assistance in addressing this matter.

Company response to consumer: Closed with explanation