Consumer complaint received 2017-09-29
Company: Flagstar Bank, N.A.
State: FL
Product: Mortgage
Sub-product: FHA mortgage
Issue: Trouble during payment process

Complaint:
I sent an electronic bank payment in the amount of {$1100.00} to Flagstar Bank on XXXX XXXX, XXXX to pay a past due " regular monthly payment '' currently {$1000.00}. Flagstar rejected the payment without cause or explanation and on XXXX XXXX, XXXX {$1100.00} was credited to my checking account. When I contacted Flagstar to inquire the reason for the rejection, a customer service representative stated that my mortgage was past due and that two ( 2 ) 'regular monthly payment [ s ] ' would need to be submitted. On XXXX XXXX, XXXX, I sent an electronic payment to Flagstar Bank in the amount of {$2200.00}. Flagstar rejected the payment without cause or explanation on XXXX XXXX, XXXX and {$2200.00} was credited to my checking account. When I called to inquire the reason for the rejection, a customer service representative stated that my mortgage was past due and I must submit three ( 3 ) 'regular monthly payment [ s ] '. Because Flagstar has refused to accept my payments, I attempted to make in XXXX and XXXX XXXX, my mortgage is currently five ( 5 ) months in arrears. Flagstar 's rejection of my payments has caused my home to be at risk for foreclosure. I dispute any late charges since XXXX XXXX since I made good faith efforts to pay Flagstar mortgage payments. It should also be noted that in XXXX XXXX, I advised Flagstar that I was suffering a financial hardship and at that time I completed a loss mitigation application. Flagstar took excessive time to review my application, which caused my documents to expire. When the documents expired, Flagstar sent correspondence stating that my loss mitigation application was incomplete. I continued to resubmit information to satisfy the incompleteness. Finally in XXXX XXXX, Flagstar offered me a re-payment plan increasing my monthly mortgage payment by approximately {$800.00}. Flagstar 's loss mitigation offer would deprive me the ability to save my home and drive me into foreclosure. I rejected Flagstar 's re-payment plan offer. In XXXX XXXX, I submitted a new loss mitigation application due to my continued financial hardship and at that time was two ( 2 ) months behind on my mortgage. Again, Flagstar took excessive time to review my application, causing documents to expire. When the documents expired, Flagstar sent correspondence stating the loss mitigation application was incomplete. I continued to re-submit documentation to satisfy the incompleteness. I was denied mortgage modification and the re-payment plan proposed by Flagstar was beyond my financial abilities. 

I felt my only choice to keep my home was to file Chapter 13 Bankruptcy and create a re-payment plan that was feasible. In XXXX, I filed for Chapter 13 and began making monthly payments to the bankruptcy trustee for the mortgage arrears as well as making my regular monthly mortgage payment directly to Flagstar. Payments to both the bankruptcy trustee and Flagstar have been made every month since and no payments have been missed. On Wednesday, XXXX XXXX, XXXX, I was notified by my bank that they " tried to process your payment to Flagstar Bank for {$990.00} on XXXX/XXXX/XXXX, but it was returned to our processing center due to the payee 's refusal to accept the payment. '' On the morning of XXXX/XXXX/XXXX, I spoke with XXXX at Flagstar Bank Customer Service to inquire about the rejected payment and he was unsure why the payment was rejected. He said he would have to look at it and give me a call later to discuss. I did not receive a return call from XXXX or anyone else with Flagstar. That same day, I contacted my bank to inquire if there were any notations to the transaction that was rejected and they could find none. The bank customer service representative noted that it seemed odd that the recent payment would have been rejected since the previous three ( 3 ) months payments were made in the same amount and in the same manner via electronic bill payment. I asked my bank to send proof of payment and I received one for each three ( 3 ) payments that were accepted by Flagstar for XXXX, XXXX, and XXXX XXXX. 

I have made an agreement through bankruptcy to pay back arrears to Flagstar mortgage and by participating in the bankruptcy, Flagstar has agreed to accept my payments to satisfy the arrearage and bring my mortgage current. By refusing to accept my recent XXXX XXXX, XXXX payment, they have breached their agreement to participate in the bankruptcy re-payment plan. The stress and financial difficulty that FlagstaXXXX has added to my life is severe. It is unfair for such a large bank to take advantage of a small consumer that is trying to do the right thing. I would like to see a penalty or reprimand issued to Flagstar for its unfair business. If their failure to accept payment while under bankruptcy protection voids Flagstar 's right to participate in bankruptcy, I wish for the Court or any other agency to take action against Flagstar. 

I would also like for Flagstar to accept my XXXX XXXX payment, waive any late charges, issue a letter of apology to me, and send a letter to the bankruptcy trustee explaining their failure to accept my payments as an error on their end.

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