Consumer complaint received 2017-12-21
Company: Flagstar Bank, N.A.
State: MD
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
In XXXX XXXX I received a letter from Flagstar Bank informing me that my home owner 's insurance had been cancelled and that it would buy a much more expensive policy for the property if I did not contact Flagstar. 

I called and informed them that my policy had not been cancelled and they verified my XXXX XXXX policy was on file. I was informed that I must 've received the letter in error and that it was all straightened out. 

In XXXX XXXX I received a second letter stating that my insurance policy had been cancelled and to contact XXXX. I called again and waited while my XXXX XXXX policy was verified in the loan file. 

In XXXX XXXX I received a letter stating that an insurance policy in the amount of {$1500.00} had been purchased for my property from my escrow account. 

I logged into my account and verified this disbursement from my escrow account on XXXX/XXXX/XXXX. I was floored and upset that Flagstar would purchase a second insurance policy on my property after two phone calls verifying that my XXXX XXXX policy was active and had never lapsed. 

Because the phone calls had not worked, this time I did an online chat with Flagstar but the representative was unable to assist me with this issue. I asked to have a supervisor call me and was told that was not an option. Okay, so Flagstar is going to steal {$1500.00} from my escrow account but no one with the authority to correct the situation can call me? Entirely unprofessional and unacceptable. 

The disbursement for my XXXX XXXX policy is shown in my payment history on XXXX/XXXX/XXXX, yet there is no refund from XXXX XXXX for any partial period. I have never received any documentation from XXXX XXXX indicating a cancellation or lapse of policy and I never cancelled the XXXX XXXX policy. I do n't know what gave Flagstar the idea that there was ever an issue with my home owner 's insurance. 

Flagstar Bank stole {$1500.00} from my account on XXXX/XXXX/XXXX and needs to be held accountable. Twice I called responding to their letters and verified that the XXXX XXXX policy was active and on file. Yet, they still went behind my back and stole money from my escrow account. 

I knew exactly what would happen : Flagstar would  increase my monthly payment due to the escrow shortage from covering this second insurance policy. Once this affected my cash flow and possibly credit score, this negligent behavior and lapse of integrity would become a huge problem. 

Well, it finally happened. On XXXX/XXXX/XXXX, I received a call from Flagstar that my XXXX payment was short by {$190.00} and was, therefore, considered late. I informed the Flagstar caller that my escrow account had been screwed up from the escrow issue and that I never received a new monthly payment amount. I immediately paid the {$190.00} shortage but I refused to pay the late fee. 

The Flagstar rep informed me that I would be reported to credit agencies. I informed her that Flagstar stole {$1500.00} from my escrow account which affected the escrow shortage calculation and I was not notified of an updated payment amount. I asked her to waive the late fee but she said she could n't do that. 

She went on to state that I never responded to any of Flagstar 's letters from XXXX or XXXX when Flagstar warned me that it would buy another insurance policy. She went on to tell me that Flagstar has an interest in the property and had to protect itself by purchasing insurance. 

I told her to bite her tongue and to not speak another lie because she was messing with my livelihood and threatening my credit score and credit history. As stated above, I called Flagstar after receipt of both the XXXX and XXXX letters and did an online chat after the XXXX letter because the phone calls clearly were n't working. 

It really feels like extortion - Flagstar is threatening to ding my credit over a {$70.00} late fee even though Flagstar stole {$1500.00} from my escrow account! 

You know what is really interesting : Flagstar called me to collect {$190.00} and try to get me to pay a {$70.00} late fee but Flagstar did not call me before stealing {$1500.00} from my escrow account. Hmmm ... Flagstar 's phones only work when someone owes them money, not when Flagstar is stealing money. 

You know what else is really interesting : XXXX XXXX XXXX policy never lapsed and my policy number never changed. Drum roll please ... wait for it ... therefore, my active policy was on file the entire time. 

The {$1500.00} was ultimately refunded to my escrow account but I never received an updated payment amount or an apology for having had that money stolen to begin with. I do not trust Flagstar - it is Flagstar 's responsibility to hire competent employees to perform their jobs with integrity. Clearly it has been unable to do so and does not want to take accountability for this issue. 

I would like to eliminate my escrow account and pay property taxes and home owner 's insurance on my own. This is how my other five properties are set up and I never have a problem because I do n't have integrity issues like Flagstar. This is a common practice and I 'm sure Flagstar can make it happen.

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