Consumer complaint received 2022-05-19
Company: Flagstar Bank, N.A.
State: ID
Product: Mortgage
Sub-product: VA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
On XX/XX/XXXX, I received loan modification paperwork by Flagstar Bank to modify my mortgage loan on the property I occupy as my residence. Included in the loan modification was a partial claim promissory note to the Department of XXXX XXXX for {$43000.00}. The loan modification updated the new principal loan amount to {$200000.00} from {$240000.00}. The partial claim accounting conducted by Flagstar Bank violated federal code ( Title 38, Chapter 1, Part 36, Subpart F, 38.4805 ) by allowing for additional funds that were not authorized by the partial claim program to be used to modify the loan. The original mortgage payment was {$1300.00}. During the COVID-19 pandemic I was granted a forbearance of 12 contractual payments, totaling {$16000.00}. Using 38.4805 as guidance the amount for the partial claim should have been {$16000.00}. I signed the loan modification documents assuming that Flagstar followed the required federal guidelines for the partial claim instrument. The loan modification paperwork I signed, including the partial claim loan promissory note, stated that the partial claim loan was " not assumable without the approval of the XXXX of XXXX XXXX or its authorized agent ''. I realized their accounting error in XXXX of XXXX. The second federal violation occurred when in XXXX I attempted to refinance my home loan through another lender ( XXXX XXXX  ) in XXXX of XXXX. The underwriters at XXXX XXXX  found that Flagstar had issued a secondary XXXX on the title of my home without the approval of the Department of XXXX XXXX, and XXXX Mortgage had not received any information from either the VA or Flagstar regarding loan pay-off amounts to complete the refinance. When I attempted to obtain the payoff of the entire loan through Flagstar in XXXX of XXXX, representatives of Flagstar directed me to the VA and XXXX XXXX ( servicer of the partial claim ). After speaking with representatives of the VA, the VA had rejected the partial claim submitted by Flagstar due to insufficient information, including the accounting used to calculate the partial claim. XXXX XXXX has no record of the partial claim submitted to their offices. Flagstar fraudulently initiated a lien on the title without having received permission and approval by the XXXX of XXXX XXXX ( or his/her representative ). Flagstar was directed in XX/XX/XXXX by a supervisor at the XXXX XXXX XXXX XXXX XXXX to releases the partial claim XXXX on the title, yet to this day has still not corrected their error or released the lien. Due to the mismanagement of my mortgage account, I am in immediate danger of losing my refinance terms and opportunity. My attempts to reconcile this issue with Flagstar have been unsuccessful, including at least 10 phone calls between XXXX and XXXX of XXXX. Flagstar Bank is also attempting to violate the terms of the loan modification by adding the {$43000.00} to the total mortgage loan amount owed without prior agreement by myself or the Department of XXXX XXXX.

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