Consumer complaint received 2020-03-11
Company: Flagstar Bank, N.A.
State: MD
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
RE : Flagstar Bank XXXX XXXX XXXX XXXX, TX XXXX On XX/XX/XXXX, I opened what I thought was an annual Mortgage Interest Statement from Flagstar Bank, only to find an Annual Escrow Statement with a shortage in the amount of {$1800.00}. According to this analysis, my monthly mortgage payment increased from {$1000.00} to {$1.00}, XXXX ; a difference of {$250.00}. How is this possible? There wasnt a huge increase in my taxes nor had I been notified of an increase in my homeowners insurance. 

Astonished, I contacted Flagstar on the following day and had an extensive conversation with XXXX  ( Insurance Service Center ) and XXXX ( Customer Service Escrow Department ). Immediately, I made it clear several times that I can not afford such an increase and am convinced that a costly error had been made on the part of Flagstar Bank. 

Between XXXX and XXXX, it was determined that the documents uploaded during the XXXX refinance process showed the deduction for taxes and insurance totaled approximately {$910.00} ; however, somehow Flagstar deducted only {$1.00} per month for taxes and insurance. How is this possible? Again, I explained that I am not in a position to pay an additional {$260.00} per month for a mortgage and insisted that XXXX provide me a copy of whatever document she was reviewing or the location of a branch office for a face-to-face with a representative. XXXX explained that she was unable to provide a copy, as the information was on a computer screen with that of other customers. Further, the shortage amount could possibly be spread over a total of 24 months, instead of the typical 12-month period. Once again, I countered that I am not in a position to afford a 24-month spread and insisted that the matter be researched for the root cause. It was suggested that perhaps a request could be submitted to extend the spread over a longer period of time. I requested a ticket be created for the longer extension and a RUSH on the second ticket to determine the incidents root cause. Further, I explained that similar situations seem to end with the vendor claiming there are no notes on the account to confirm any previous conversations, leaving the consumer holding the bag. As a result, I was provided a reference number for each incident ; # XXXX to investigate the insurance set-up and # XXXX to investigate the shortage created by the insurance set-up. XXXX submitted the urgent rush request and assured me that a response would be sent via email. 

On XX/XX/XXXX, I contacted Flagstar for a status update. XXXX confirmed there was no update and even though an urgent rush request was submitted, any response would take approximately 3 5 business days. Later that morning, I noticed an email alerting me that case # XXXX was resolved. A few days later, I received a revised Annual Escrow Statement that the new mortgage payment is {$1200.00}. Does this mean that regardless of my situation, there are no exceptions ; an extension beyond 24-months will not be considered ; there are no other options, case closed? 

On XX/XX/XXXX, I contacted Flagstar for a status update on case # XXXX. XXXX confirmed both case numbers then explained the target date for resolution was XX/XX/XXXX and that I should call back on XX/XX/XXXX. On XX/XX/XXXX, I received an email that case # XXXX was resolved on XX/XX/XXXX and any changes would be reflected in my online account within 3-5 business days. 

This entire situation is unsettling to say the least. I reached out to Flagstar Bank two weeks ago and have yet to receive a concrete, detailed, satisfactory response to my pointed questions. The email responses simply provide the case number, resolution date and to allow 3-5 business days after the resolution date to view their response online via MyLoans Account. 

In XX/XX/XXXX, I refinanced with XXXX XXXX XXXX for a mortgage payment more manageable than the {$1200.00} per month with XXXX XXXX. In XX/XX/XXXX, Flagstars escrow analysis resulted in a decreased mortgage payment from {$1100.00} to {$1000.00} and created a surplus of {$240.00}. 

Once again, I do not understand how or why this discrepancy occurred. My original signed refinancing packet includes a payment letter specifying that my monthly mortgage payment will include deductions for principal and interest, escrow for insurance and escrow for taxes. I did not request any changes to this agreement. As managers of my account, the insurance and tax notifications are submitted directly to the mortgage company for payment. Any data entry errors that cause a discrepancy in the disbursement of funds to the principal, interest, or escrow accounts should have been flagged in a monthly reconciliation process. With that said, if I remitted a monthly payment of {$1000.00} from XX/XX/XXXX to XX/XX/XXXX and the funds initially earmarked for the escrow accounts were understated, is the balance in the principal and interest account overstated? Again, what is the root cause of this egregious error?

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation