Consumer complaint received 2020-02-27
Company: Flagstar Bank, N.A.
State: CA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
My complaint is against Flagstar Mortgage. Their address is XXXX XXXX XXXX, XXXX Arizona. XXXX. 

My house burned down on XX/XX/XXXX. All of my insurance proceeds were given to Flagstar.

At the time of the fire, I owed less that {$350000.00} on my house. The insurance proceeds were more than that, I don't remember the exact amount. I signed a PROPOSAL with a contractor and sent them the information they requested, including the contractor 's licensing information, etc. This proposal was not a firm contract. An amount of {$120000.00} ( rounded off figure ) was sent to the contractor in XX/XX/XXXX. At that time, the contractor had not even set foot on my property. No work was ever done by this contractor. To make a long story short, the contractor filed bankruptcy, did not complete any of the houses he started, and charged me {$24000.00} for " overhead expenses '' when a final contract had never been signed. I sent a letter of termination to this contractor in XX/XX/XXXX.

I signed a new contractor with a different contractor in XX/XX/XXXX. Despite the fact that this contractor gave me specific amounts of money due at various times, Flagstar will not give them money that they are owed. I have given my contractor approximately {$300000.00} of my own money to keep them up-to-date on my contracted payment schedule. My contractor has done well over the amount of work that the mortgage company holds, yet they will not release funds that my contractor is due. The value of my property alone is worth well over what they ever held, as it is prime real estate on 6+acres.

In addition to this, Flagstar has never paid me any interest on the money they are holding in my investment account. I would think that I should be due interest, as well as interest on the money that they erroneously sent to my original contractor, who did nothing. I do not have a specified person to communicate with through Flagstar. They have a " bank '' of people manning the phones, and almost every time I try to speak to them about anything, I spend over an hour trying to get an answer. I have documented these calls, and I would estimate that over the course of the 2-1/2 years, I have spent over 100 hours on the phone trying to get answers to my questions. Their system is definitely flawed. I have written them letters and received no response.
What I would like is for the money that is due to my contractor to be released. I have been without a house for over two years, and I want this house to be finished. I have never missed a payment, and now I am paying for the house that is yet to. be completed as well as rent. I really need to get this house finished, and I feel that Flagstar is delaying that from happening. I also think that they should be responsible for the amount that I did not get back from the original contractor. By the way, the original contractor NEVER asked them for that money. Flagstar sent it to them without even being asked. This is another factor that I have tried to discuss with Flagstar to no avail.

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