PennyMac AutoPay Service Agreement

1. Terms and Conditions: I (“I”, “my”, “me” and “Borrower” refer to all borrowers) understand that although I am not required to use this service to pay my home loan payments referenced in my authorization (my “Loan”), I request that PennyMac, including its agents, successors and assigns (“Servicer”) enroll me in the PennyMac AutoPay automated service (the “Service”), as a convenience to me under the terms and conditions set forth in this Service Agreement (this “Agreement”), and I agree to the following:

2. Limiting Conditions Before PennyMac AutoPay Can Begin: I authorize Servicer to initiate electronic debits from the financial institution associated with the financial routing number in my authorization (my “Financial Institution”) from the referenced financial account number (my “Financial Institution Account”), in order to pay for my schedule payments under my Loan plus the costs of any goods or services that I request. I will continue to initiate and make my payments with respect to my Loan via other payment methods until I am notified in writing when the first automatic payment begins (approximately 1 month from my authorization, subject to verification of information). I am responsible for verifying that my Financial Institution is a member of the Federal Reserve System, which is a requirement under this Agreement, and allows Servicer to perform the Service. I AM RESPONSIBLE FOR MAKING PAYMENTS ON MY LOAN BY OTHER MEANS, IF ANY PAYMENTS ARE NOT DRAFTED ON THE SCHEDULED DRAFT DATE NO MATTER THE CAUSE. The Servicer’s obligations with respect to the Service shall terminate upon payment-in-full of my Loan.

3. How This Plan Works: Depending on loan product, it may be necessary for Servicer to increase my payment to the nearest dollar, so that my total payment (including any amounts for escrowed/impounded taxes and Insurance) can be easily divisible by two (2), with any overage being credited to my Loan as set forth in my Loan documents. Servicer may send multiple drafts to my Financial Institution during each scheduled withdrawal date. One draft will be for the payment amount I have requested to be drafted, and the other draft will be for fees and charges that correspond to the Service that I have selected, if applicable. If any draft is returned or rejected by my Financial Institution, Servicer will not be responsible for any additional fees assessed to me by my Financial Institution. If my scheduled date from my Financial Institution Account falls on a holiday or weekend, my electronic payment may be debited from my Financial Institution Account on the next business day. The electronic payment amount will automatically adjust to any new scheduled payment amount that may result from the terms of my Loans documents. Servicer will give me the advance notice of the new payment amount. Such adjustments may include but are not limited to increases or decreases in the scheduled monthly payment as a result of adjustments to the interest rate, required escrow or changes in principal amount pursuant to the terms of my Loan documents. I understand that I am responsible for ensuring that there are sufficient funds in my Financial Institution Account to pay the scheduled monthly payment, including any new scheduled monthly payment amount. I understand that transfer of funds will not occur if there are insufficient funds in my Financial Institution Account or my financial Institution refuses to pay amounts for any reason and that I will be responsible for any fees related to such nonpayment as set forth in section 6. If there are insufficient funds in my Financial Institution Account or my Financial Institution refuses to pay amounts to Servicer for any reason, Servicer will attempt to cause my Financial Institution to draft from my Financial Institution Account two (2) times. I understand that my Financial Institution may attempt to draw upon my Financial Institution Account more than twice, and that such process is in no way related to Servicer. If the second attempt by Servicer to cause my Financial Institution to draft from my Financial Institution Account fails, I will be responsible for paying the funds owed under this Agreement and my Loan documents immediately, and I may be automatically terminated from the Service. If three (3) separate debit processes are rejected by my Financial Institution, on the first attempt by Servicer, I may be automatically terminated from the Service without further notice from the Server. If I am terminated from the Service, I shall have no further rights under this Agreement, and Servicer shall have no further obligations under this Agreement. I will continue to be responsible for any fees or changes related to this Agreement for services rendered, and the fees or charges owed will be added to my Loan obligation.

4. How and Why My Payments Will be Applied: Servicer will apply fully scheduled payment amounts to my Loan account based upon the priority of payment/application provisions set forth in my Loan documents. As described below, Servicer will hold amounts in a partial account until a fully scheduled payment amount is received. I understand that when funds are placed in a partial account, such funds are not being applied to my Loan at that time. Therefore, Interest will accrue under my loan as if no payment was made, until an amount equal to my fully scheduled payment is received and applied to the Loan. I agree that Servicer will not pay me any interest or provide me with any other economic benefit for funds being held in a partial account. I understand that Servicer may derive a benefit as a result of holding partial payments in its accounts during the period of time while a full payment has not yet been made. Any direct or indirect benefit that may be associated with any funds held in a partial account shall accrue to Servicer. I waive any right or any other related benefits that Servicer may receive. I understand that Servicer may, at its option, exercise its right to return partial payments to me if a full payment is not received. In order for the Service to begin, Servicer must have received and applied my scheduled monthly payment on its regularly scheduled due date in the same month that my first biweekly payment service will begin (i.e., I must be paid ahead one (1) month). I understand and agree that, if I fail to make certain that I am paid one (1) month ahead, Servicer will not enroll my Loan in the Service. The Service is not available for all loan types and some plans may not be available in all states. The following is a summary of my plan, as applicable to the plan chosen by me and available based on my loan type:

  1. a. Monthly Plan: Twelve (12) monthly drafts will occur and be applied as twelve (12) regular payments. My scheduled draft date must be selected from the dates available for my loan type.
  2. b. Bi-Weekly Plan: Twenty-six (26) biweekly drafts will occur, twenty-four (24) of which will be applied as a regular scheduled payments and two (2) biweekly drafts equaling a full scheduled payment amount will be applied to reducing the principal balance of my Loan. One-half of my scheduled monthly payment will be debited from my Financial Institution Account with each biweekly draft and placed in a partial account. If the funds in my partial account equal a full month’s scheduled payment on the scheduled payment due date under my Loan documents, an amount equal to a full month’s scheduled payment will be applied to my Loan account. During months in which more than two (2) biweekly drafts occur, the third draft will also be applied to my Loan after my scheduled payment on my scheduled due date of the following month. Any additional funds from the third draft will be applied toward reducing my principal balance. I agree that Servicer will credit all full payments, including prepayments, on the next regular scheduled due date for periodic payments under my Loan documents. I further agree that my electronic payments may be held in the normal accounts maintained by Servicer for partial payments accepted but unapplied until the next payment due date.


5. What I Must Do If My Loan Becomes Delinquent: If my Loan becomes delinquent or I am otherwise in default, I will notify Servicer to determine whether this Service will continue or be cancelled. If the Service is cancelled, I agree to make any payments myself, via check or other method, to bring and keep my Loan current and my payments consistent with the Service’s payment schedule.

6. Nonpayment by My Financial Institution: Notification and Cancellation of Services: I understand and agree that I will be charged an insufficient funds fee by Servicer for each transaction that results in nonpayment from my Financial Institution Account, and that such nonpayment could result in a late payment fee under my Loan documents. The maximum insufficient funds fee amount that I will be charged is the maximum number allowed by applicable law. If my Loan is delinquent or otherwise in default, automatic payment may not take place unless Servicer, in its sole discretion, allows the automatic payment. The Service may be cancelled, in Servicer’s sole discretion, at any time, and may not be transferable, if the servicing of my Loan is sold or transferred to another loan service. In the event that my Financial Institution changes or intends to change my current information, and such information is required to successfully draft from my Financial Institution Account, I agree to provide this information to Servicer at least ten (10) days in advance of any changes that would interrupt the Service. To cancel the Service, I must contact Servicer within three (3) business days before the next draft. If the Service is cancelled, I agree to make any payments myself, via check or other method, to bring and keep my Loan current and my payments consistent with the Service’s payment schedule.

7. My Loan Documents Remain Binding and Enforceable; Loan Payoff; Non-Assignability; Indemnity: I understand and agree that the Service does not modify the original terms and conditions of my Loan obligations. If I am planning to pay off my Loan and the draft due date is within ten (10) days of my payoff date, I will notify Servicer at least three (3) days prior to the next scheduled draft date. Failure to provide such notification to Servicer may result in excess funds being drafted from my Financial Institution Account. Payment in full of my loan will terminate Servicer’s but not my obligations under the Service. I hereby release and will indemnify Servicer for any and all losses, damages, claims, costs and expenses resulting from any party claiming that Servicer is not authorized to draft my Financial Institution Account as set forth in this Agreement. I understand and agree that I cannot assign this Agreement or my rights under this Agreement to another person or entity. Assignment by me to a third party will automatically terminate my rights, but not my obligations, under this Agreement.

8. Servicer’s Right to Modify or Cancel: Servicer reserves the right to cancel, modify restrict, waive or terminate this Agreement or any aspect of this Agreement at its sole discretion at any time upon sending written notice to my mailing address of record with Servicer. I understand and agree that I may simply reject any offered change, restriction or modification by cancelling the Service as set forth in Section 6 above at least three (3) business days prior to the next scheduled draft date. I further understand and agree that I have agreed to any change, restriction or modification, if I fail to timely cancel the Service with respect to the draft.

9.Bankruptcy Disclaimer: Upon Servicer receiving notice that you or your account are subject to a pending bankruptcy proceedings, or that you have received a discharge in bankruptcy, Service will immediately be cancelled due to the automatic stay or discharge injunction imposed by federal bankruptcy law. Servicer will notify you in writing of such cancellation. However, if your account is paid current at the time Servicer receives notice of the bankruptcy proceedings or discharge, you may reapply for the Service. A new application is necessary to ensure your consent in writing to the automatic deductions from your bank account while under protection of federal bankruptcy law. If at the time you receive this application, you or your account are subject to active bankruptcy proceedings or previously have received a discharge, this application is provided for information purposes only and is not an attempt to collect a debt against you personally.