Consumer complaint received 2020-12-05
Company: Flagstar Bank, N.A.
State: LA
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Trouble during payment process

Complaint:
I sustained damage from Hurricane Zeta and following an insurance inspection I was issued a check to cover the amount of the damages sustained. First, I was told two different stories by two different customer service reps with the insurance department. I originally endorsed my check and the second rep told me to cross out my name where I had endorsed the check, initial the cross out and to not endorse again until receiving the check endorsed by XXXX. So I did that because as she told me I am in forbearance not in default so XXXX will endorse the insurance check and return to me in full so that I can move forward with paying contractors for work to my house that needs to be done. 

Well today I received the check back along with a letter saying that I need to endorse the check because my Claim Requires Monitoring, which means they will only issue me draws on the amount that they will place in escrow. I need the insurance funds released in full and because I am in forebearance I cant get repairs done to my house because Flagstar wants to issue me the insurance money payments in installments only after inspections have been done. I was lied to by two Flagstar reps because both indicated that Flagstar would be issuing me the check for the insurance money in full, but obviously thats not the case. Rather Flagstar wants to issue me draw payments the repairs that need to be done to a house that will sustain more damage during the next rainfall. Not only that but my house is not structurally sound so there could be a liability issue if something were to happen to somebody delivering packages, a solicitor or a child that happens to throw a ball on my property and the overhang collapses. And who is going to be liable for these issues? I will be liable. So obviously Flagstar does not want me to keep my house because I cant afford repairs without the insurance money. I have paid my premiums for the last 10 years to the same insurance company and Im not living in a house that will sustain more damage and theres potential for a liability issue leading to me getting sued personally. Is Flagstar going to reimburse me for the last 10 years of premium payments that Ive been making? They are making it so I cant get repairs done to my home. So Ive been left no option other than breaching my mortgage contract because Incant get the repairs done and Flagstar can deal with a house that will sustain even more damage due to me not being able to repair anything, the house will go into foreclosure because Im not paying for a house that I cant get repaired because Flagstar is holding that money captive. I need to get three separate contractors to complete repairs and 2 of 3 will not begin any repairs without payments being made immediately following the completion of work. That will be much sooner than the time it will take for Flagstar to decide when they will issue me payments and thats only after doing inspections on the house so this will go on for months to get these repairs done. Furthermore, I can not trust that I will not have to got through XXXX and back to get full payment to the one contractor who will Work and receive payment later. That is absolutely asinine. What is happening now in Louisiana because there have been so many hurricanes is that contractors if not paid in full upon completion of a project, and on that day or with in 48 hours they are placing liens on properties. These sort of stipulations are part of contracts that are being signed to commence work and contractors are taking it very seriously. I am an insurance defense construction litigation paralegal I deal with this all the time so I am not someone that is under aware of insurance dealings, and I am also not too keen on contractor liens being placed on my home. And to add insult to injury Flagstar wants me to pay more money ( that I dont have ) to continue having the insurance check overnighted to Arizona and back to me once again which will in total cost me {$100.00} in shipping fees under false pretense. I just got my job back after being furloughed for nearly 7 months and Flagstar knows this. Yet opposed to my previous belief, I now see that Flagstar couldnt care less that there is a global pandemic and people are suffering. Im trying to do the right thing by getting the house repairs completed and Flagstar has made that impossible. This is the most outrageous situation that I have ever dealt with in my life. My own insurance company will not release my insurance funds for my house that Ive been paying for for 10 years and I cant get any money to repair my house. If thats not the most ludicrous thing that Ive ever heard, then I dont know what is. I need help and intervention is needs at this point. I am in dire straights now.

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