Consumer complaint received 2023-09-07
Company: NEW YORK COMMUNITY BANCORP INC
State: TX
Product: Mortgage
Sub-product: FHA mortgage
Issue: Trouble during payment process
Sub-issue: Paying off the loan

Complaint:
My name is XXXX XXXX. I have been in the mortgage industry for 20+ years. I have held many positions throughout, including processing, doc preparation, funding, and underwriting. In XXXX, while as a processor, my husband and I purchased a home. I became a loan officer in XXXX on a mission to help renters become homeowners. In XXXX, we sold that house, using that equity to purchase the home we are currently in. In XXXX, when COVID was in it's early phases, Forbearances became the lifeline for many with much of the unknown upon us. 

There was a lot of conflicting information regarding what would happen if you had a forbearance or what it would do to one 's credit profile. With the world essentially shut down, I went ahead and opted for a forbearance in XXXX of XXXX utilizing a 7 month forbearance, which allowed me to go alongside clients and being able to explain how it works, navigating it, and being a resource for my clientele should they come to me for guidance. We signed documents that stated it would be paid back upon sale, or refinancing. 

We refinanced in XX/XX/XXXX, paying off our original mortgage with Flagstar, pulling some cash out and getting into a conventional mortgage. 

Fast forward to today. We are in process of selling our home. A exciting but also nerve wracking time. As we got closer to the closing date ( which is today ), we were told there was still money from that forbearance that was still due an payable. In digging around, it turns out Flagstar took what was the balance still due from the forbearance and held on to it. They had failed to record the deed of trust showing those funds were still due as originally agreed to in XX/XX/XXXX ( when forbearance docs were signed ). I ended up uncovering that the deed later was recorded 4 months after we refinanced back in XXXX. 

Now as we close today, thankfully we have the equity to pay it back and they were able to catch us when they did. I imagine there are a lot more people who utilized the forbearance option, to later sell their home, even though Flagstar didn't record the forbearance deeds in a timely manner, leaving many unpaid liens on the new owner 's property. 

I've attached a general timeline for reference. I do have copies of signed docs, copy of recorded deeds with info needed to corroborate the timeline. 




XX/XX/XXXX home is purchased. FHA Loan used. 
XX/XX/XXXX home is put on forbearance due to COVID restrictions XX/XX/XXXX - paperwork signed resolving forbearance, signed documents to put at the back of the loan XX/XX/XXXX mortgage payments begin XX/XX/XXXX payoff requested XX/XX/XXXX cash out refinance completed. FHA loan paid off. 
XX/XX/XXXX Full reconveyance received from Flagstar Bank XX/XX/XXXX XXXX XXXX is awarded HUD contract for managing partial claim forbearances for servicing and payoffs XX/XX/XXXX ISN records partial claim deed dated XX/XX/XXXX forbearance onto property, no copy received by us XX/XX/XXXX pre-escrow and sale begins. Old deed still required to be paid XX/XX/XXXX home sold. All loans paid off.

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