Mortgage Loan Purchase

Overview

PennyMac will, in most cases, wire funds for purchase of a mortgage loan the business day following the date on which PennyMac approves the loan for purchase, provided that re-pricing of the mortgage loan is not required.

Wire Setup

For PennyMac to purchase a loan from a Seller, the Seller must provide written authorization for PennyMac to wire funds to the appropriate bank account, usually the Seller’s warehouse bank. An authorized signer must complete and sign a Wire Authorization Form to pre-establish the Seller’s warehouse bank accounts. The Seller is solely responsible for ensuring that the information on the Wire Authorization Form is accurate and complete and PennyMac shall be entitled to rely on the information contained in the form without further inquiry.

If loans are delivered without wire instructions, or if the wire instructions in the loan file do not match the instructions in PennyMac's system, the loan file will be suspended. The suspension will not be cleared until approved wiring instructions signed by an authorized signer are received, processed, and entered into PennyMac's system.

PennyMac will only wire to corporate accounts upon prior approval.

Purchase Proceeds

PennyMac net funds loans based on the calculation of:

  • Base price as noted in the confirmation letter
  • Addition of any applicable pricing specials
  • Increase or decrease for accrued interest
  • Decrease for any applicable price adjustments
  • Decrease for escrow and buydown accounts
  • Decrease for any outstanding unpaid fees due PennyMac


Decline to Purchase

PennyMac may reject any mortgage loan for purchase for any reason including, but not limited to:

  • The mortgage loan failed to meet PennyMac published loan parameters,
  • The mortgage loan failed to satisfy all of the applicable underwriting standards,
  • Unacceptable documentation of the mortgage loan,
  • Suspected fraud in the origination of the mortgage loan or a breach of any other representation, warranty or covenant made with respect to the mortgage loan as stated in the Guide or in the Correspondent’s Loan Purchase Agreement.


Principal Balance Purchased - Amortization

The principal balance at time of purchase will be adjusted as follows:

  • Any payment for the following month on loans purchased on or after the fifteenth of the month will be amortized.  As an example consider a loan closed on 9/15/17 with a first payment due date of 11/1/17.
  • If purchased on 10/13/17 no payments will be amortized
  • If purchased on 10/15/17 the 11/1/17 payment will be amortized and netted from the purchase wire.
  • If purchased on 11/15/17 both the 11/1/17 and the 12/1/17 payments will be amortized and netted from the purchase wire.
  • PennyMac withholds all MI/MIP associated with amortized payments however the Correspondent is responsible for the timely remittance of MI/MIP payments on these loans as well as any late fees incurred prior to purchase.

Requesting MI/MIP Refund on Amortization Purchases

  • To request a refund on a previously remitted MI/MIP payment, the client must send a refund request to Send email to ["CorrespondentPostClosing"].. The email must contain borrower name and the full PennyMac loan number.


Accrued Interest

  • If PennyMac should receive the principal and interest payment scheduled for the first day of the month following the month during which a mortgage loan was purchased, PennyMac will pay the Correspondent accrued interest at the interest rate stated in the applicable note from the first day of the month of purchase through the day prior to the date of purchase.
  • If the first scheduled principal and interest payment PennyMac should receive is due on the first day of the second month after the month of purchase, the purchase proceeds paid by PennyMac will be reduced by an amount equal to interest accrued at the interest rate stated in the applicable note from the date of purchase through the last day of the month of purchase.
  • All loan products will accrue interest using the 365 days interest factor at time of purchase, although they can be closed using 360 days or 365 days interest factor.


Escrow Waiver Fees

Refer to Loan Pricing Adjustments (LPAs) for the applicable escrow waiver fee. LPAs are available on the PennyMac Correspondent Rate Sheet

The Escrow Waiver Fee is a deduction from the base price.

Post Closing Correction

PennyMac's policy for escrow corrections is:

  • The Correspondent may request corrections through 6 months after the purchase of the mortgage loan. The request can be for reimbursement of escrow funds paid in error by the Correspondent.  After the 6 month time frame, neither PennyMac nor the borrower is responsible for returning escrow funds to the Correspondent.

Note: PennyMac will not be responsible for reimbursement of escrow funds to the Correspondent for loans paid in full or sold.

  • PennyMac may request reimbursement from the lender through 12 months after the purchase of the mortgage loan. Correspondents are responsible for escrow errors for a complete 12 month cycle after the date of purchase.

PennyMac's policy for borrower payment reimbursement is: 

  • The Correspondent may request Payment Reimbursement through 6 months after the purchase of the mortgage loan with Collection efforts.  After the 6 month time frame, PennyMac is not responsible for reimbursing payments to the Correspondent.

Note: If loans are paid in full or sold within the 6 months after the purchase of the mortgage loan, PennyMac will not be responsible for Payment Reimbursement to the Correspondent.