Consumer complaint received 2021-09-30
Company: Flagstar Bank, N.A.
State: CA
Product: Mortgage
Sub-product: VA mortgage
Issue: Struggling to pay mortgage

Complaint:
We are going out of Forbearance beginning XXXX. I called Flagstar at the beginning of XXXX and asked for a modification. I told Flagstar we could resume payments, but not if the payment wasn't lower than our current amount. I called on XX/XX/21 to follow up because I hadn't heard anything on the modification. They said documents were sent out XX/XX/21 on the approval. We did not receive any documentation and didn't know of any new payment. When I called on XXXX they said we were approved for a payment that was more than what our previous payment was. I asked about the VA Covid Refund Modification and if we were considered for it. They couldn't give me an answer about what the modification consisted of and kept passing me off to another person. I stayed on hold for 30 minutes and no one came back to help me. Before they passed me off to someone else, they told me I needed to go through loss mitigation since we couldnt pay the amount of the new payment. Through loss mitigation, all our expenses and income etc. would be evaluated, which I do not feel should happen because of the VA Covid Refund Modification that is available, and lenders are to apply this program. 
I called back on XX/XX/21 and spent an hour on the phone and they told me the amount in arrears was added to the loan, the interest rate stayed the same, and it wasnt extended in the number of years. There was no modification, only adding what was past due to the loan amount, which increased the monthly payment. This is not a helpful solution, especially since I specifically told them we had to have a lower payment. This option sets us up for foreclosure. Flagstar continued to say it couldnt be appealed since we didnt respond. We didnt respond because we didnt receive any paperwork. The first knowledge of a higher payment was on XX/XX/21 when I called to check on the status like they instructed me to do if I hadnt heard from them. 
After being sent to another person again and waiting on the phone for another 20 minutes for someone to help me, I was told the underwriter always looks at all programs available. This is not a true statement. The VA Covid Refund Modification was not taken into consideration on our modification. If it had, the payment would have decreased based on how the program works. This is a disservice to a veteran and family with no control over the situation due to the pandemic. I was then told if I complete the documents through loss mitigation, it will open up all options for modification. All options should have been considered in the first place. I shouldnt have to provide any paperwork because the VA Refund Modification does not require that evaluation, its approved automatically. 
Our loan should be modified immediately using the VA Covid Refund Modification sent out XX/XX/21 from the VA Benefits Administration in Circular XXXX resulting in a lower payment. If our payment is not lowered, we will be forced to foreclose on our house as a result of Flagstar not being willing to help in any way possible.

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