Supplemental Tax Bills generally are not included in the escrow account set up for your loan. These supplemental bills are the responsibility of the property owner to pay. However, if paying this bill will create an undue hardship, you can request PennyMac to pay this bill from the balance remaining in your Escrow Account and any shortfalls will need to be made up over the course of future escrow monthly payments.
Can I request PMI cancellation based on my property's current value?
Yes, you may request to have your loan reviewed for PMI cancellation based on the current value of your home, rather than the original value. Generally, the current value of the property needs to be validated by an appraisal (at your own expense). The property must meet a certain LTV ratio to be considered, generally 75% or below depending on investor guidelines, regulations and/or state law. If the loan closed less than 2 years ago you may need to provide evidence of substantial improvement to the property value.
How can I file a property claim if my insurance is escrowed?
If you sustain damage or loss to the property that secures your mortgage loan, you need to contact your insurance carrier to file a claim. The carrier will send an adjuster to the property who will assess the damage. If the damage that has occurred is covered under your insurance policy, an insurance claim check should be sent to you. This check would include PennyMac as an additional named payee under the mortgagee clause of your policy. Once you have received the insurance claim check, you can contact PennyMac's Insurance Department for an explanation of the process by which PennyMac will monitor the repair process and disburse the insurance proceeds. If your loan is current and the total insurance claim check is less than $10,000, PennyMac will endorse the check over to you to be used for repairs. If your loan is delinquent or the check is more than $10,000, PennyMac will deposit the funds into a restricted escrow account and pay you from those funds once repairs are completed. Before sending your check to PennyMac, please make sure all other payees have signed it or PennyMac will not be able to start processing your request. You should send the check to the following address: Insurance Claim Center - Attention: Loss Drafts PennyMac 618, PO Box 621534, Atlanta, GA 30362
How can I keep track of payments made to my escrow account?
You may view account activity such as escrow payments by visiting the Loan Activity section of your online account. In the Loan Activity section, you can view PennyMac activity describing who was paid, how much, and when it was paid. In addition, you may view this information in the Transactions section of your monthly billing statement, which reports activity since your last statement.
How can I let PennyMac know that I qualify for homestead exemption?
Homestead exemption laws, available in some states, protect the value of a home from property taxes, creditors and circumstances arising from the death of a homeowner spouse. If you have qualified for an exemption, you can send PennyMac a copy of your homestead exemption document and upload it through the secure Message Center of your online account. Create or locate a copy (PDF format preferred) of your homestead exemption document. Visit the secure Message Center on this website. Compose and send a message with the homestead exemption document as an attachment.
How can I request to be reviewed for PMI cancellation?
In order to begin a review of the eligibility process, please contact us using one of the following methods: Submit a secure message request via the website through the Secure Message Center. Call our Customer Service department for assistance and a specially trained Customer Service representative will walk you through a pre-screening of the possible eligibility on your loan. If it is determined that your loan may qualify for PMI cancellation, your request will be assigned to the PMI Deletion team for further review.
How do I set up an escrow account on my mortgage and how will I know if PennyMac has received my request and completed the setup?
You may submit a request through the secure Message Center of your online account that you would like to set up an escrow account. You will be notified of any documents that you will need to provide for PennyMac to set up your escrow account. You may also visit the Contact Us page to call Customer Service. Once complete, you will receive a written confirmation. In addition, you can check if your escrow account has been set up by viewing your account details in the Escrow Center section of your online account.
How long will I have to pay for PMI on my loan?
PMI on a conventional loan will be terminated automatically when the principal balance is first scheduled to reach 78% of the original value of your home. The loan must also be current on the anticipated cancellation date, or it will be terminated after the loan is brought current. Additional requirements regarding the loan may need to be met to determine eligibility. A confirmation letter will be mailed to you when PMI is terminated automatically. The Homeowners Protection Act (HPA) gives you the right to request PMI cancellation when the principal balance of your mortgage is scheduled to reach 80% of the original value of your home, or the date the principal balance actually reaches 80% of the original value. Cancellation may require an appraisal (at your own expense) to confirm your home's value hasn't declined since closing; a good payment history and being current on your payments; and certification that there are no junior liens on your home. Some state laws may have additional requirements for cancellation or termination of PMI.
I have taxes and/or insurance due now; will I still be able to set up an escrow account?
Property taxes and insurance premiums must be paid in full and current prior to establishing an escrow account. If you have a tax or insurance premium due within one month of receipt of your escrow setup request, you must first pay those items as they come due.
Is an initial deposit required to establish an escrow account?
There is no fee or deposit required to establish an escrow account. However, a deposit to create an initial balance in your escrow may be beneficial for you in order to begin saving for the upcoming payment amounts due. Generally, a deposit equal to two months escrow payment, subject to state limitations, is recommended.
My loan was transferred from another servicer to PennyMac this year. Who will provide my year-end amounts for the full year?
You will receive two year-end statements. One will be from your prior servicer and the second will be from PennyMac for the time after your loan was transferred.
What do I need to do if my insurance is cancelled and/or force-placed or lender-placed insurance is placed on your property?
Most mortgages require proof of a minimum amount of hazard insurance to protect the lender's interest in the property that secures the mortgage loan from fire, wind, and other property damage. If your insurance is cancelled, it is important for you to replace any required insurance on the property right away. Failure to replace a cancelled policy may result in the placement of insurance coverage by your lender (known as lender-placed or force-placed insurance) to meet the required minimum insurance for the property. Force-placed or lender-placed insurance is purchased when PennyMac receives notification that your homeowner's, flood, or other hazard insurance coverage has been cancelled and we have not received renewal or replacement policy information. The cost of lender-placed insurance will be added to your monthly mortgage payment. Lender-placed coverage may be more expensive than insurance you would purchase yourself and may not provide the same coverage. In order to avoid lender-placed insurance, please consider taking the following steps: Create or locate a copy (PDF format preferred) of your insurance policy declaration page. Visit the secure Message Center of your online account. Compose and send a message with the insurance declaration page as an attachment. PennyMac will update your insurance information within 3-5 business days from the time we receive the request and the insurance declaration page. Once completed, the new insurance information will be reflected in the Escrow section of your online account that details your insurance information. If there is a change in any lender-placed insurance, visit the secure Message Center of your online account. Compose and send a message with the declaration page or policy as an attachment. If we purchase lender-placed coverage and you can provide proof of your own coverage for that period of time, any lender-placed premiums will be refunded and credited to your escrow account.
What does a Current Escrow Balance represent, what is an escrow cushion and why is it included in my escrow account?
This is the amount of money currently in your escrow account available to pay taxes or insurance for your property. Your escrow account includes a two-month cushion of your monthly escrow payment to prevent a shortage amount in case your taxes or insurance payments increase. You can locate your Current Escrow Balance in the Escrow section of your online account.
What if I want to change insurance carriers?
Having an escrow account does not prevent you from making changes to your insurance. This means you are free to change insurance carriers any time you wish. To make a change in carriers, request your old carrier to forward a cancellation notice to PennyMac. Please ensure your new insurance company is aware that your insurance is escrowed and also provide them with your loan number and the mailing address found on the Contact page on this website to ensure your monthly premium is paid by PennyMac on time.
What if my monthly mortgage payment is automatically drafted from my checking or savings account and my escrow payment changes?
Once PennyMac sets up your new payment, it will automatically deduct from your bank account at the new payment amount if you are signed up for the PennyMac AutoPay service (ACH). It is your responsibility to ensure that there are sufficient funds in your account on your scheduled payment deduction date. Please check the Make A Payment section of your online account for all pending payment information. If you use an online banking or bill-pay service, you may need to adjust the payment amount directly through that payment service as PennyMac will not have access or authority to do it on your behalf.
What is Private Mortgage Insurance?
Private mortgage insurance, also called PMI, is a type of mortgage insurance used with conventional loans. Like other kinds of mortgage insurance, PMI protects the lender if you stop making payments on your loan. Most mortgage lenders require private mortgage insurance (PMI) on conventional mortgage loans originated with a loan to value (LTV) ratio greater than 80%, meaning the borrower made a down payment of less than 20% of the home's purchase price, or refinanced with equity less than 20% of the value of the home. PMI protects the lender from losses if the borrower defaults on the loan. Typically, a borrower will pay for PMI by a monthly premium added to the monthly mortgage payment. Sometimes PMI is paid for with a one-time upfront premium paid at closing, or with both upfront and monthly premiums.
What is a mortgagee clause and how should PennyMac be identified?
A mortgagee clause in an insurance policy reflects the name and address of your mortgage lender or servicer, which would be a co-payee on any amounts paid by the insurer on a covered claim based on the lender's interest in your property that secures its mortgage loan. PennyMac's address for the mortgagee clause of your hazard policy is: PennyMac Loan Services, LLC Its Successors And/Or Assigns P.O. Box 6618, Springfield, Ohio 45501-6618
What is an Annual Escrow Analysis, how often will I receive an Escrow Account Analysis Disclosure statement, and do I need to do anything in response to the Annual Escrow Analysis statement?
An escrow analysis statement will show you what is projected to be paid over the next twelve months to ensure that your property taxes and insurance premiums are kept current. If your taxes and insurance are serviced by PennyMac, we will analyze your escrow account at least once every twelve months to ensure there are sufficient funds being collected to make all scheduled payments. The annual escrow analysis determines if any adjustments need to be made to your escrow payments based on projected payments for the coming year. You should review this statement to make sure that PennyMac is scheduled to pay your taxes and/or insurance premiums at the correct time and for the correct amount. Discrepancies should be reported to PennyMac immediately. An annual escrow analysis details amounts collected, payments made, and anticipated payments for the coming year. This analysis is available to you in the Statements & Documents section of your online account and by mail if you have not elected paperless only delivery.
What is an escrow account?
An escrow account (also known as an impound account) is an account established to help customers pay property taxes and insurance premiums for their mortgaged property. Deposits are made to the escrow account from your monthly mortgage payments in addition to the principal and interest amounts due. Note that supplemental tax bills generally are not paid from the escrow account. Any supplemental tax bills must be paid directly by you to the taxing authority. Similarly, homeowner or condo association dues are not paid from your escrow account, and they should be paid directly by you. This type of escrow account is different than the escrow account established by the closing agent during the making of your loan.
What is the difference between PMI and MIP?
PMI is a type of mortgage insurance used with conventional loans. Conventional loans may be eligible for early removal of monthly PMI premiums, as long as certain requirements are met. Borrowers with FHA-insured loans pay an up-front mortgage insurance premium (UFMIP) and annual mortgage insurance premiums (MIP). These premiums are set as a percentage of the loan amount. FHA mortgage insurance premiums are normally required regardless of the LTV, and generally last for the life of the loan. The rules for cancellation or termination of PMI do not apply to FHA or VA loans.
What part of my payment is applied to my escrow account and what happens if PennyMac has to pay my taxes or insurance premium and there is a different amount in the escrow account than the amount owed?
The amount of money applied to your escrow account is determined by the amount needed to pay your taxes and/or insurance on a yearly basis. This amount will change when the amount needed to pay these items either increases or decreases, or the scheduled payment for the last year has not been met. You can find the amount of your escrow payment in the Loan Activity section of this website or on your monthly billing statement. PennyMac will pay the full amount due for your taxes and/or insurance premiums even if you do not have sufficient funds in your escrow account. The shortage will be reflected on your monthly statement, and PennyMac will collect the shortage back from you in additional monthly amounts over the next twelve months after your escrow account is analyzed. Your escrow account is set to be analyzed every twelve months. If there are any extra or surplus funds, an overage check will be sent to you within 30 days after the analysis has been completed.
What should I do with the tax bills that I continue to receive?
If your account is escrowed for taxes and you receive a tax bill, you do not need to take any action as PennyMac receives the information as well. However, if you receive a delinquent notice, you will need to send it to PennyMac. You can contact us through the secure Message Center of your online account to share the information contained in the letter. Create or locate a copy (PDF format preferred) of your tax bill. Visit the secure Message Center of your online account. Compose and send a message with the tax bill as an attachment. If PennyMac does not include your tax payment in the escrow account, you are responsible for payment of your taxes directly to the taxing authority. Failure to pay these taxes in a timely manner may result in PennyMac paying these amounts on your behalf and requiring reimbursement and/or creation of an escrow account as part of your mortgage payments going forward. If you are not sure whether PennyMac collects for payment of your taxes, please visit the Escrow section of this website.
When can my Private Mortgage Insurance be reviewed to be taken off my loan?
Mortgage insurance may only be cancelled when certain requirements are met based on investor guidelines and applicable law. If you feel that you have met the criteria, you may submit a secure message through your online account to be reviewed for cancellation. Create or locate a copy (PDF format preferred) of your written request to remove your mortgage insurance. Visit the secure Message Center of your online account. Compose and send a message with written request as an attachment.
When is my conventional loan eligible for PMI deletion?
Generally the PMI will be terminated automatically when the principal balance is first scheduled to reach 78% of the original value of the secured property, based on the initial amortization schedule, provided that the loan is current on the anticipated cancellation date. Additional requirements regarding the loan may need to be met to determine eligibility. When the PMI is terminated automatically, a confirmation letter will be mailed. If the loan to value reaches 80% prior to the automatic termination on point, you may initiate a review for PMI deletion. However, there may be a cost for a Brokers Priced Opinion (BPO) or an Appraisal.
When will I receive my escrow or surplus refund balance after I have paid my loan in full?
Once your loan has been paid in full, the escrow/surplus balance (if any) will be refunded to the mailing address on our system within approximately 15-21 business days from the date of the payoff transaction. If you are moving, please be sure to provide any change of address at the time of your loan payoff.
When will my year-end statement be available?
Year-end statements will be mailed and available online the third week of January. Be sure to update your preferences to select Paperless Delivery method if you do not wish to receive the paper year-end statement. You will be able to access the year end statement online at any time once it is available.
Where can I send my proof of insurance?
You can send your proof of insurance to PennyMac via the secure Message Center in your account: Create or locate a copy (PDF format preferred) of your insurance policy declaration page. Visit the secure Message Center of your online account. Compose and send a message with the insurance declaration page as an attachment. As soon as your information is updated in the system, you will be able to view your updated information by visiting the Escrow section of your online account.
Where should I send my insurance bill?
If your insurance is escrowed, PennyMac must be identified in your insurance policy as the mortgagee. You will not need to send PennyMac your insurance bill as you receive it so long as PennyMac is named in the policy as we will receive a copy as well. However, if you receive a delinquent insurance bill, you should send us a copy. You may do so by sending a message through the secure Message Center of your online account: Create or locate a copy (PDF format preferred) of your insurance policy declaration page. Visit the secure Message Center of your online account. Compose and send a message with the insurance declaration page as an attachment. If PennyMac does not escrow for payment of your insurance, you are responsible for payment of your premium directly to your agent/carrier. Failure to pay these premiums in a timely manner may result in PennyMac purchasing an insurance policy to protect our interest in the property, which will increase your monthly payment amount. Force-placed or lender-placed coverage may be more expensive than insurance you would purchase yourself and may not provide the same coverage. If you are not sure whether PennyMac collects escrow for payment of insurance premiums, please visit the Escrow section of this website.
Why should I set up an escrow account to pay my taxes and insurance?
The benefit of an escrow account is that you do not have to worry about paying a large tax or insurance bill in one lump sum. Additionally, PennyMac will always ensure that your taxes and insurance are paid when they come due, even if there is a shortfall in the amount available in your escrow account. Any such shortfalls will be made up over the course of future monthly escrow payments.
Will PennyMac cancel PMI at midpoint?
Yes, PMI will be terminated automatically if you reach the midpoint of your loan's amortization schedule (halfway through the life of your loan). For example, on a 30-year loan, the midpoint would occur after 15 years have passed. This may occur for people who have a mortgage with an interest-only period, principal forbearance, or a balloon payment. Keep in mind that you must be current on your monthly mortgage payments for termination to occur.
Will PennyMac cancel my PMI on my conventional loan at Midpoint?
Generally, the PMI on loans will cancel through auto-termination or borrower requested deletion; however, if these dates have not been reached, your PMI will be terminated automatically on your loan if you reach the midpoint of your loan's amortization schedule. The midpoint of your loan's amortization schedule is halfway through the life of your loan. For example, on a 30-year loan, the midpoint would occur after the 15 years have passed. Keep in mind, you must be current on your monthly mortgage payments for termination to occur.
Will PennyMac pay for Condominium/ HOA fees?
No, condominium and homeowner association ("HOA") fees are not included in your monthly mortgage payments. You are responsible for paying condominium/HOA fees directly to your association.