Consumer complaint received 2024-09-26 00:00:00
Product: Mortgage — USDA mortgage
Issue: Struggling to pay mortgage — Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure
Company: PENNYMAC LOAN SERVICES, LLC.
State: AL

Complaint narrative:
Updated Mortgage Letter On XX/XX/XXXX I contacted PennyMac customer service to inquire about a one month forbearance ( which is advertised on their website as providing temporary relief by allowing you to pay reduced, or even no, payments for a brief time, depending on your individual situation, along with protection from late fees and negative credit reporting ) due to an unforeseen emergency. I only needed assistance in the month of XXXX and informed them of this. I also stated that there was a possibility that I could make the XXXX payment but that it would be late. I told them that my main goal was to keep them updated so that my account could remain in good standing. 

I was informed that there was a program available that could temporarily that could assist me. I was informed that I would needed to submit supporting documentation ( including current homeowners insurance, hazard and flood insurances, deed, pay stubs, etc. ) I was also told that the sooner I submitted the information the sooner my application could be processed. I gave my verbal consent to have my application processed. At that time my account was immediately placed into a pending application status. I was assigned a point of contact for my assistance application, however, I never spoke to that person, she never contacted me, I ever was never able to reach her via telephone. 

I began gathering documented requested to submit for consideration. I contacted PennyMac by phone on XX/XX/XXXX and XX/XX/XXXX regarding the status of my account and questioned why I had to send information that was already on file and had already been submitted during the inital loan application. I was told that it was part of the process. By XX/XX/XXXX all requested documents had been received and I was informed by email ( XX/XX/XXXX ) that a decision has been made and that I would be notified by mail within 30 days ( by XX/XX/XXXX ). I checked the website daily and contacted PennyMac frequently for updates but no information was available. 

On XX/XX/XXXX I received an email notification that there was an updated escrow statement available. At that time I was notified ( electronically ) that my monthly escrow payment was increasing effective XX/XX/XXXX, which would cause my monthly mortgage payment to be {$2400.00} - {$800.00} more than my normal monthly payment of {$1600.00}. I immediately called PennyMac to discuss the notice I had received. I was told that because I had a pending loan modification application, that the amount in the letter was not accurate. I was told that no payment was due at that time, and that I could disregard the notice. 

On XX/XX/XXXX, I contacted PennyMac in reference to my account. I informed them that I had not yet received an answer on the status of my forbearance assistance ( for the month of XXXX ) and that I didnt want my account to fall behind so I wanted to continue with my monthly payment. I was told that payments were not require while your application was pending, but that they were encouraged, so I made a partial payment in the amount of {$1400.00} ( which was placed in suspense ) and informed them that I intended to make the the additional {$200.00} payment within the week to bring the account current. ( Per my loan agreement, partial payments may be held in suspense until a full payment is made. ) On XX/XX/XXXX I received a notice regarding the renewal of my required hazard insurance. At that time I found out that through some sort of mishap, lender based insurance had been purchased on my behalf. The amount of this insurance totaled {$5300.00}. On XX/XX/XXXX I contacted PennyMac via phone reference to the Insurance notice and payment increase. I spoke with the insurance department and explained that I already had insurance. I was informed that our homeowners insurance had dropped us unexpectedly and therefore lender based insurance, flood, and hazard insurance had been purchased on our behalf. I advised them that we were not aware of this and that to our knowledge, we already had active insurance. They sent a link me for me to upload all of my insurance information for review. This prompted me to began reviewing our account statements and mortgage documents, at which time I found that we had already paid for the insurances in question at the beginning of our loan. It seemed that by mistake, we were charged ( again ) for additional hazard and flood insurance. These charges led to a deficit in our escrow account, which therefore resulting in a higher monthly payment. By XX/XX/XXXX I had uploaded all required documents and all insurance information had been updated. 

Around XX/XX/XXXX, or shortly there after, I received a letter stating that my loan modification had been approved and that a trial payment in the amount of {$1900.00} was due by XXXX XXXX. 

On XX/XX/XXXX, I contacted PennyMac by phone in reference to the aforementioned discrepancies. I informed the representative about the conflicting information pertaining to my loan, insurance, escrow, and payment amount. I advised them that I did not want to be in a loan modification and requested that I be taken out. I explained that the proposed modification amount was significantly more than my original mortgage payment, and that it appeared that the modification terms that they were offering were based on incorrect information. I tried to explain that the payment they proposed was based on relief from a monthly payment of {$2400.00}, and what led to the error. The representative said that she would have to make a request for the modification be cancelled and that in the meantime she would transfer me to the escrow department so they could help me resolve my situation. 

Upon speaking with a representative in the escrow department, and apprising him of the situation, he confirmed my insurance information on file and asked for verbal authorization to run an updated escrow analysis. After the analysis was completed he informed me that my payment would return to {$1600.00} and stated that a refund check would be issued in the amount of {$110.00}. I asked about my payment for the month of XXXX and he stated that XXXX was the correct payment amount and that the account should be updated. 

Around that time, I also received my mortgage activity statement received for the month of XXXX ( statement date XX/XX/XXXX ). In the statement my account was listed as being 45 days delinquent with a payment due date of XX/XX/XXXX. ( Past due amount due as {$5800.00} ) My regular monthly payment was listed as {$2400.00} ( the updated payment amount due to incorrect escrow ), and it included a late fee of {$54.00}. On the back of this statement, it listed payments in the amount of {$1600.00} due for the month of XXXX and XX/XX/XXXX. ( {$1400.00} is held in suspense. ) On XX/XX/XXXX, I was notified by mail that the lender placed insurance issued in compliance with my mortgage/lien agreement was cancelled - effective XX/XX/XXXX and XX/XX/XXXX. According to the account statements ( available for download on the PennyMac website ) on XX/XX/XXXX, XXXX days after making the escrow department aware of the mishap, XXXX credits were issued to my account in the amount of {$2000.00} and {$3300.00} ( listed as escrow reversal ). 

Between XX/XX/XXXX and XX/XX/XXXX I contacted PennyMac several times to request that my payments applied/distributed correctly, and to request that I be taken out of modification. None of these things happened. On XX/XX/XXXX after being unable to make my normal monthly payment, due to not being given the option, I was forced to pay the only amount that the system would allow me to pay, which was {$1900.00}. On that same day PennyMac mailed a notice stating that I had a new point of contact named XXXX XXXX. And although it listed a telephone number, anytime I called the number I was automatically directed to modification customer service and she was not available. 

In mid XXXX we received a mortgage activity statement ( dated XX/XX/XXXX ) which listed a past due amount due of {$4900.00}. In this statement, the regular monthly payment was still listed as {$2400.00}. The transaction activity denotes a refund for hazard insurance ( {$5300.00} ), which was applied to my account in the form of ( 2 ) regular monthly payments. ( {$1600.00} ) In addition there was a partial payment in the amount of {$1400.00} which was applied to the principal, as well as charges for late payments and ( 2 ) property inspection fees. Between XXXX and XXXX I frequently checked my online account as well as contacted PennyMac by phone with the expectation that my account would be updated and restored to the original contract- in accordance with my request and the updated escrow analysis. It was not. 

On XXXX XXXX I mailed a check to PennyMac in the amount of {$1600.00}, My regularly monthly payment amount as given by the escrow analysis. On XX/XX/XXXX I once again contacted XXXX by phone in a final attempt to resolve my account issues. I stayed on the phone for several hours and spoke with several representatives but I was not able to get any answers in reference to the state of my account. Out of desperation I tried several different numbers ( found on XXXX ) listed for PennyMac loan services. However, every time I called, I kept being transferred to the same department.

I finally spoke to someone who advised me to ask for a manager and request that my case be escalated.

I was transferred to a representative who advised me that if I cancelled the modification agreement that my account would go to collections. At that point I asked to escalate the situation and be transferred to a manager. I spoke with a manager and explained the timeline and I made a final request for my account to be returned to original agreement. I explained the entire situation and I inquired about the payments that had been made and why they were not being applied to my account. I I was told that the escrow refund had been placed on the principal balance of my loan, which was I dated was incorrect. I explained that my initial request was simply for a one month forbearance- ( for the month of XXXX ), and that since then several conflicting things had occurred. 

I informed the representative that full payments for the month of XXXX and XXXX, plus an additional {$1400.00} had been refunded and placed on my account from the escrow refund. In addition, there was a payment of {$1400.00} made on XX/XX/XXXX, that had previously been held in suspense ( but had been moved without my consent ) and the payment of {$1900.00} made on XX/XX/XXXX, as well as the {$1600.00} payment that had been mailed in XXXX should bring the account current. I requested that they removed the late payments from my credit report and update my balance and payment history as well as remove me from the modification status that I was placed in. 

The representative stated that the request to remove me from the modification status had already been out in and that is should be updated the next day. But that the payments would not be reallocated and that I discontinued the program without making the trial payments that my account would be subject to collections and that I owed over {$5000.00}. I asked her what the money that I had paid thus far had been applied too and why it had not been accounted for and she said that it did not count towards monthly payments. 

On XX/XX/XXXX I received a mortgage account statement from XXXX which stated that I had been approved for a trial modification plan, indicating that my requests had once again been ignored. It cited that an escrow refund took care of payments for XXXX and XXXX, notated the {$1900.00} payment made in XXXX but made no mention to the additional {$1400.00} payment made in XXXX or {$1600.00} payment made in XXXX. From XX/XX/XXXX until todays date ( XX/XX/XXXX ) we have paid Penny Mac a total of {$5100.00}. ( This amount does not include the refunds that were applied due to an oversight in the insurance and/or escrow.

Despite repeatedly contacting them and rejecting the terms of this program several times over the last XXXX XXXX months, they continue to ignore our requests. They have continuously failed to adequately communicate between departments, which continues to cause conflicting information, resulting in my being overcharged, and our loan to be repeatedly mishandled. 

Not only are they are attempting to force us to make payments that are greater than our original contractual agreement by reporting negatively to the credit bureaus, they are intentionally failing to report payments correctly, and threatening to proceeding with collective action if we dont pay these inflated prices. 

While they advertise temporary relief, it appears that theyre actually penalizing customers who come to them with a financial issue and strong arm them into a predatory modification. Their tactics have been intentionally deceptive and their handling of our account has been very careless.This program is a trap, cloaked in the form of assistance In the last moths my credit score has decreased significantly and I have suffered adverse financial repercussions, including credit denial, decreased limits, and rescinded credit on accounts previously in good standing. This situation continues to cause extreme financial strain and emotional duress.

Company response to consumer: Closed with non-monetary relief