Frequently Asked Questions | Pennymac (2024)

mortgage relief & assistance

Will my credit be affected by accepting a trial period payment plan or a loan modification?

Yes. Staying current on your payments is the best way to protect your credit. If you enter into a modification, your credit may be negatively affected. Your loan will be reported as paying under a partial payment plan during the trial period, and as modified after the final modification agreement is signed, notarized and returned. In addition, if you’re behind on your payments when you start your trial, your loan will continue to be reported as “delinquent” until your loan has been permanently modified, even if you’re making your trial payments. Credit scores are determined by a customer’s credit history and are not controlled directly by Pennymac. Our commitment is to accurately report the status of all our customers.

My property has been damaged due to a natural disaster. What should I do?

If you've been impacted by a natural disaster or property damage caused by an accident, click here to learn more.

What are the basic eligibility requirements for a loan modification?

A loan modification may be an option if: you are ineligible to refinance, you are facing a long-term financial hardship, your monthly mortgage payments are no longer affordable, you are behind on your mortgage payments or likely to fall behind soon, and/or you have the willingness and ability to make reasonable monthly mortgage payments.

Will Pennymac perform an escrow analysis when completing a loan modification?

Yes. Lenders perform an escrow analysis to determine the escrow payments prior to establishing a trial period payment, taking into consideration the tax and insurance payments that may come due during the trial period.

My loan is currently in foreclosure. What happens next?

A forbearance plan may be an option for you, even if you are currently in foreclosure. Typically, a loan is referred to foreclosure at or around the 120th day of delinquency, unless the loan is being evaluated for a loan modification or other foreclosure prevention program.

A repayment plan may be an option for you, even if you are currently in foreclosure. Successful completion of your repayment plan may help avoid a foreclosure sale while giving you time to bring your loan current.

A modification may be an option for you, even if you are currently in foreclosure. Successful completion of a modification may help avoid a foreclosure sale while giving you time to bring your loan current.

How do I apply for a loan modification?

Pennymac offers a number of modification options. Click here to learn more about loan modifications.

I need payment assistance as a result of a natural disaster or property damage?

A repayment or forbearance plan may be a payment assistance option for you. Successful completion of your repayment or forbearance plan may help avoid a foreclosure sale while giving you time to bring your loan current. Please visit our Property Damage & Payment Assistance page here for more details.

Am I eligible for a repayment plan?

You can contact Pennymac today to speak with a representative who can determine if you pre-qualify for a repayment plan or other home retention option. Please be prepared to provide verbal financial information concerning your current income and expenses.

Will a repayment plan affect my credit?

Yes, a repayment plan can affect your credit. Every plan is unique, so it may be best for you to reach out to your single point of contact to learn how your specific plan may impact your credit. Please note, Pennymac does not control your credit score. We recommend that you contact the credit agencies for information on how the repayment plan may impact your credit.

What is a repayment plan, and how can it help my current situation?

A repayment plan allows you to catch up on your missed payments over time while continuing to make your current payments. If you qualify for a repayment plan, we can spread your past-due amount over an agreed upon term and add it to your current monthly mortgage payment in order to bring your loan current. By exploring a repayment plan option, you are working on finding a solution to your temporary hardship so it does not have long term effects. No further late charges will be assessed on your loan as long as you make your payments on time.

What should I do if my loan is scheduled for foreclosure?

If you’re in foreclosure proceedings or your home has been scheduled for a foreclosure sale, contact Pennymac immediately so we can discuss your available options. You may also want to take advantage of HUD-approved housing counseling services. You can call the Homeowners Preservation Foundation hotline at (888) 995-HOPE to speak with a HUD approved Housing Counselor in your community. In order to protect your rights under applicable foreclosure law, it’s important that you continue to respond to any foreclosure notices you may receive. We encourage you to contact a lawyer or housing counselor to learn more about the legal consequences of foreclosure.

What is a trial modification or trial plan? What happens if I don't successfully complete the trial plan?

The purpose of the Trial Period Plan is to show that you're willing and able to make the modified monthly payments. The trial period lasts a minimum of three months. If you qualify, we'll send you a Trial Period Plan Notice explaining the terms and amount of your payments. It will be based on our estimate of what your monthly payments would be with a permanently modified loan. Your Trial Period Plan becomes effective when you make your first trial plan payment. Payments can be made online using the One-Time Payment option on this website. You must make each Trial Period Plan payment in a timely manner, in the amount specified in the notice, in order to receive a permanent modification. If your original loan payment does not include amounts to pay your property taxes and/or homeowners insurance, an escrow account will be created and those amounts will be added to your monthly payment. If you’re unable to successfully complete the Trial Period Plan to receive a permanent modification of your mortgage, you may need to consider options that involve relocation to a more affordable home. If your home is currently worth less than the amount remaining on your loan, you may be able to either sell your house through a short sale or sign over title to your home to your lender through a deed in lieu of foreclosure. These programs usually include relocation assistance payments to help you move to a more affordable home.

I've made all my payments during the trial period; what happens next?

To be approved for a permanent loan modification, you must successfully complete your Trial Period Plan, complete housing counseling if you have been asked to do so and return any additional required documentation in a timely manner. After you're approved, you'll receive a letter and Modification Agreement defining the changes to your home loan. You will need to sign the Modification Agreement in front of a notary and return the notarized executed agreement as soon as possible, but no later than the deadline date listed on your documents. Your modification only becomes permanent after Pennymac receives the executed agreement and verifies accurate signatures and notary. Until then, we strongly encourage you to continue making payments in the same amount you paid during your trial period. Please note: Once your loan is permanently modified, your new monthly payments could be higher than your Trial Period Plan payments.

What if I do not qualify for a loan modification?

Depending on the timing, we will try to work with you on another loss mitigation option, which may involve relocating to a more affordable home.

Frequently Asked Questions | Pennymac (2024)


What credit score do you need for Pennymac? ›

Pennymac will accept a FICO score as low as 620 for conventional loans, though the lender says that a conventional loan may be a good fit for a customer with a score of at least 680.

How to get rid of PMI Pennymac? ›

How do I delete PMI? 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 for most mortgage types.

How much is the Pennymac recast fee? ›

Non-Default Primary & Subordinate Related Fees
Type of FeeFee DescriptionEstimated Fee Amount
Principal RecastRe-amortization of the loan after a significant principal reduction is made to the loanUp to $250, as permitted by applicable law or investor
15 more rows

Who is Pennymac backed by? ›

PennyMac was founded in 2008 (during the subprime mortgage crisis) by Stanford Kurland, the former President of Countrywide Financial, with financial support from BlackRock and Highfields Capital Management.

What is the lowest credit score for a FHA loan? ›

Credit score: While the FHA has set the minimum credit score at 500, many FHA-approved lenders require higher minimum FICO scores of at least 620. Down payment: While obtaining an FHA loan requires you to make a down payment, that payment doesn't necessarily have to come from your savings account.

What's the lowest credit score to get a mortgage? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

Will Pennymac let you skip a payment? ›

Mortgage Relief

It's called a short-term forbearance—a plan that provides 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. Getting set up with a forbearance plan is easy.

Can I remove PMI from my mortgage without refinancing? ›

Yes. You have the right to ask your servicer to cancel PMI on the date the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. The first date you can make the request should appear on your PMI disclosure form, which you received along with your mortgage.

Can mortgage insurance be removed on an FHA loan? ›

With an FHA case number assignment date on or after June 3, 2013, the FHA insurance can be terminated by the servicer or holder if the mortgage is paid in full before the maturity date.

What is the PennyMac controversy? ›

PennyMac Financial Services has paid $158.4 million to Black Knight Servicing Technologies, concluding a five-year legal battle over allegations of trade secret theft involving two of the biggest companies in the housing industry.

Does a mortgage recast lower your monthly payment? ›

Mortgage recasting is a form of prepaying your mortgage. To recast your loan, you'll make a lump-sum payment toward the balance. Your lender will then reamortize the loan with the smaller balance and new, lower monthly payments. Although your loan has been recast, you'll retain the same interest rate and loan term.

How to lower mortgage payment without refinancing? ›

How to lower your mortgage payment without refinancing
  1. Recast your mortgage. ...
  2. Cancel your mortgage insurance. ...
  3. Lower your homeowners insurance or property taxes. ...
  4. Consider a bi-weekly mortgage payment plan. ...
  5. Ask your lender for a loan modification. ...
  6. Pay off your loan.
Oct 6, 2023

What FICO score does PennyMac use? ›

Currently, Pennymac requires a minimum 620 FICO Score on all government loan programs. Effective Friday, April 29, 2022, Pennymac is updating the minimum FICO Score requirements on FHA, VA, and Rural Housing loans for both Full Doc and Streamlines/IRRRLs to a FICO Score of 580.

How does PennyMac make money? ›

We have a strong track record of performance and earnings growth, driven by solid execution of our growth strategies while remaining focused on quality and governance. PennyMac Financial operates in three business segments: Loan Production, Loan Servicing and Investment Management.

What bank is PennyMac? ›

PennyMac Financial Services, Inc. (NYSE: PFSI) is a specialty financial services firm with a comprehensive mortgage platform and integrated business focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market.

How to get a mortgage with a 580 credit score? ›

An FHA mortgage is a government-backed loan guaranteed by the Federal Housing Administration. This is why they're a good option for borrowers with bad credit. You can qualify for an FHA loan with a low credit score of 500 and a 10% down payment, or 3.5% down if your FICO is 580 or above.

What is the minimum credit score you will need to borrow money? ›

Payment history is weighed the most heavily in determining your credit score, along with your total outstanding debt. Generally, borrowers need a credit score of at least 610 to 640 to even qualify for a personal loan. To qualify for a lender's lowest interest rate, borrowers typically need a score of at least 800.

What is the Pennymac loan limit? ›

Pennymac Correspondent is excited to announce that we're raising our Conventional loan limits to $750,000 1, effective Wednesday, October 11, 2023.

What credit score do you typically need for a mortgage? ›

There isn't a specific credit score you need for a mortgage, and that's because there isn't just one credit score. When you make an application for a mortgage or other type of credit, lenders work out a credit score for you.

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