Yes. A federal judge in North Carolina has already let a proposed class action against PennyMac Loan Services over mortgage fee practices move forward, rejecting the company's attempt to have it thrown out.
That ruling, along with a second pending case over COVID-relief fees, means borrowers with fee disputes have a live, tested legal path, even though no settlement or government order against PennyMac exists yet. PennyMac is one of the largest mortgage servicers in the country, the company that collects your monthly payment, manages escrow, and charges fees when something goes wrong or when you pay in certain ways. Two separate lawsuits now accuse it of charging fees that borrowers never agreed to in their loan paperwork.
Table of Contents
- The Pay-to-Pay Fee Lawsuit Against PennyMac
- What the Court's Ruling Actually Decided
- A Second Case Over COVID-Relief Fees
- Is This a PennyMac Problem or an Industry Problem?
- What You Can Actually Do Right Now
- Frequently Asked Questions
The Pay-to-Pay Fee Lawsuit Against PennyMac
The core case is *Williams v. PennyMac Loan Services LLC*, filed in the Middle District of North Carolina. The complaint alleges PennyMac charged borrowers so-called "pay-to-pay" fees — up to $6.75 for an automated payment and up to $15 when a borrower paid by phone through a live representative, according to Accounts Recovery.
These are convenience fees charged on top of the regular mortgage payment, specifically for the act of submitting that payment electronically or through a person rather than by mail. The lawsuit's central argument is that the loan note and deed of trust — the documents that spell out everything a borrower owes — never mention these fees at all. Because of that gap, the complaint claims the fees violate the North Carolina Debt Collection Act and the state's Unfair and Deceptive Trade Practices Act, according to Law360. Both laws restrict what a debt collector or servicer can charge beyond what a contract explicitly authorizes.
What the Court's Ruling Actually Decided
On December 2, 2025, the judge denied PennyMac's motion to dismiss, which means the case survives and moves into discovery rather than ending at the courthouse door, according to Law360. Discovery is the phase where both sides exchange records, internal policies, and payment data before any trial. PennyMac's main defense was that it doesn't personally collect or keep the pay-to-pay fees — it argued a third-party payment processor does.
The court ruled that this is a factual question that can't be settled on the papers alone; it has to be sorted out as the case develops, per the same Law360 report. That distinction matters for anyone watching the case: a dismissal would have ended the claims outright, while this ruling only means PennyMac must now defend itself with evidence rather than on legal technicalities. No damages, refunds, or admission of wrongdoing has resulted yet.
A Second Case Over COVID-Relief Fees
A separate lawsuit, *Cyrus v. PennyMac Loan Services LLC*, was filed in 2024 in Connecticut federal court and covers different conduct entirely. It alleges PennyMac stopped accepting veteran borrowers into a deferred-payment COVID-19 relief program without notifying them, then charged higher interest rates, late fees, and other charges once those borrowers resumed payments, according to Bloomberg Law.
The complaint brings claims for breach of contract, unjust enrichment, and violations of Connecticut's unfair trade practices law over those added costs, per the same Bloomberg Law report. Unjust enrichment is a claim that a company kept money it wasn't entitled to, separate from any written contract term. Together, the two cases show PennyMac facing fee-related claims on two different fronts: automated payment convenience charges in one, and relief-program fallout for veteran borrowers in the other.
Is This a PennyMac Problem or an Industry Problem?
Pay-to-pay fee lawsuits under the same North Carolina statute are pending against other mortgage servicers too, including *Bell v. Select Portfolio Servicing* and *Custer v. Dovenmuehle Mortgage*, according to Orrick's InfoBytes.
That pattern suggests this is an established legal theory being applied across the servicing industry, not a one-company allegation. The Consumer Financial Protection Bureau's April 2024 Supervisory Highlights separately found that mortgage servicers industry-wide had improperly charged property-inspection fees for inspections that violated Fannie Mae guidelines, and had charged late fees exceeding the limits set in loan agreements, though that report did not name PennyMac specifically, per a summary from Manatt. PennyMac itself does not appear on the CFPB's public enforcement-actions index for fee practices. The pay-to-pay and COVID-relief claims against it are private class actions brought by borrowers' attorneys, not a government enforcement case.
What You Can Actually Do Right Now
There is no PennyMac class action settlement open for claims yet, and no government consent order to join. The *Williams* case is still in discovery, which typically takes months before any resolution, settlement, or payout becomes possible. If you believe PennyMac charged you a fee not authorized in your note or deed of trust — a pay-to-pay charge, an inflated late fee, or a disputed property-inspection fee — you have a few practical options while these cases proceed: A borrower with a real fee dispute isn't starting from nothing — the *Williams* ruling establishes that these claims can survive a motion to dismiss under state debt-collection law, giving individual complaints a legal framework to stand on even without a class settlement to join.
- Pull your mortgage note and deed of trust and check whether the specific fee you were charged is listed anywhere in them.
- Keep statements, payment confirmations, and any records showing the fee amount and the payment method you used.
- Consult a consumer-protection or debt-collection attorney in your state, since claims like these are typically brought under state law, not federal law alone.
- Watch the *Williams* case docket for a resolution or settlement announcement, since that is the most advanced fee-related case against PennyMac right now.
- File a complaint with the CFPB if you suspect a fee violates servicing rules, even though no PennyMac-specific enforcement action currently exists.
Frequently Asked Questions
Has PennyMac settled the pay-to-pay fee lawsuit?
No. As of the December 2025 ruling, the *Williams* case had only survived a motion to dismiss and moved into discovery; no settlement has been reached.
What is a "pay-to-pay" fee?
It's a charge for submitting a mortgage payment through a specific method, such as $6.75 for an automated payment or up to $15 for paying through a live representative, according to Accounts Recovery.
Is the CFPB taking action against PennyMac directly?
No public CFPB enforcement action names PennyMac over fee practices; the pay-to-pay and COVID-relief cases are private lawsuits, not government cases.
Does the veterans' COVID-relief lawsuit involve the same fees as the pay-to-pay case?
No. *Cyrus v. PennyMac* involves higher interest rates, late charges, and other fees tied to a disrupted deferred-payment relief program, a separate dispute from the automated-payment convenience fees in *Williams*.