Consumer complaint received 2022-06-14
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Flagstar Bank, N.A. (AK)

Dear CFPB : Below is the letter we sent to Flagstar Bank. 
It summarizes the complaint and situation. 

Flagstar Bank has rejected any appeal to re-instate this loan according to their original agreement after misleading us to make incorrect payment amounts or to not make payments. This predatory advice led them to cancelling our loan modification after making 6 months of payments to this new agreement and never receiving loan documents despite repeated attempts. All of which is described in detail in the below letter. I am hoping there is a place for me to attach related and supporting documents within this online CFPB complaint forum. 

Date of letter to Flagstar : XX/XX/XXXX Dear Flagstar Bank : Hardship Relief Task Force Attention : XXXX Re : Loan Modification Account Name : XXXX XXXX Loan # : XXXX Loan Details Address : XXXX, Alaska XXXX My wife and I were impacted by the Covid pandemic due to reduction of income hardship. This represented a significant decrease in income and we decided to take advantage of the Emergency Covid Relief Loan Mitigation Forbearance program being offered in XXXX. 

In XXXX of XXXX, we contacted Flagstar to end our forbearance. Flagstar instructed to begin the XXXX XXXX  XXXX XXXX option which began in XX/XX/XXXX. We received and returned our Terms and Conditions document in XX/XX/XXXX and made our first of three predetermined loan payments starting in XX/XX/XXXX. We successfully completed the agreed upon modified monthly payment ( third payment ) in the amount of {$2900.00} of the three month trial period ; completed on time in XX/XX/XXXX. 

We were instructed that we would be receiving updated loan documents and conditions paperwork to reflect the new loan modification with 3 % interest rate and with similar monthly payment amount of {$2900.00}. We were to look for these documents to arrive in XX/XX/XXXX. 

We were once again impacted by Covid when I was admitted to the hospital in late XX/XX/XXXX. I was intubated soon after and would not leave the hospital again until XX/XX/XXXX. However, as we were impacted for the second time by Covid in a terrible way this time, we did not pull out on the modified agreement. Through the blessings of the XXXX XXXX XXXX, my wife was able to honor the agreement and continue making monthly payments. A lump sum of ( $ ) {$8700.00}, was sent in XX/XX/XXXX, and was received by Flagstar to represent the XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX, mortgage payments. 

Regardless, we did not receive any updated documents from Flagstar, as promised, during these three months. My wife tried to contact the bank as often as she could while balancing the care of our XXXX XXXX XXXX son and all of the medical struggles that come with fighting for your husbands life in the hospital. 

In XX/XX/XXXX, we still had not received any updated loan documents, a statement, or new conditions, etc. My wife called with the legal assistant to the local XXXX office to attempt to make the XX/XX/XXXX loan payment, as the XXXX required a statement in order to make a payment. Both my wife and the XXXX were quite shockingly told by Flagstar to not make a payment in XX/XX/XXXX. The reason given by Flagstar was that the payments that were made for the previous months in XXXX and XXXX had somehow interfered with the underwriting form being completed and they were told to not make any further payments until documents were received. They said the terms and conditions had not been updated and they could not produce a statement to reflect the modified terms for the XXXX to make payment. 

By early XX/XX/XXXX, my wife called as we had not received any documents from Flagstar, as promised, and she tried once again to make a payment. She was again told by Flagstar to wait to pay until the documents from Flagstar were received. We assumed the XXXX and XX/XX/XXXX mortgage payments would be wrapped into the streamline loan modification, as is common in refinance and modification loans. However, when we called again on XX/XX/XXXX together, as I had finally recovered enough to come home from the hospital. To our dismay, we were told by Flagstar that we were two months behind in payments after previously being told not to pay, and we were informed that the Loan Modification had been cancelled in XX/XX/XXXX. 

We escalated in XX/XX/XXXX and worked with XXXX, supervisor ID # XXXX. He looked into what exactly is happening with our account, as we have still have not paid XX/XX/XXXX due to not receiving any documents from Flagstar. Since that time in XX/XX/XXXX, we have been calling almost every week for an update and have been told every time that Flagstar would reach out to us. Our latest call on XX/XX/XXXX, was with XXXX, supervisor ID # XXXX. Upon her review of the account, she confirmed that the modification had been cancelled/terminated in XX/XX/XXXX and that the lump sum amount paid by the XXXX in XX/XX/XXXX, had been applied to months that the loan was in deferment status. She informed us that we would have to restart our modification process and make back payments as well. 

We are extremely angry, frustrated, and upset with the lack of follow-through and response from Flagstar. Upset to discover this noncompliance from Flagstar, as it appears this very scenario to be predatory lending practices by Flagstar in purposefully delaying our loan documents. Starting with never issuing the updated terms in XXXX and advising us to not make payments in XXXX ; then labeling us delinquent and not honoring the original terms of our original modification agreement set forth in XX/XX/XXXX, and to result in cancellation of our modification after we fulfilled our end of the bargain. Flagstars actions and inactions are clearly fraudulent, deceptive, and absurd. 

To recap : we have been calling every week for a resolve status since early XX/XX/XXXX with no resolve. In fact, we have been calling since XX/XX/XXXX for a resolve status with absolutely no resolve. This cancellation/termination has occurred all after we entered into a legally issued and agreed upon modification with Flagstar, XXXX XX/XX/XXXX. We met on time, the first three trial modification mortgage payments, in monthly amount of : {$2900.00}, per the modification repayment plan agreement with Flagstar, in XX/XX/XXXX. We made three additional mortgage payments, XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX, monthly amount : {$2900.00}. All while still waiting on loan documents ; which to this day have never arrived. We were then advised by Flagstar to stop paying our mortgage during our XXXX and XX/XX/XXXX phone calls with Flagstar, with instruction from Flagstar to wait until we received our modification loan documents to make our next payment. 

Why were our loan documents not issued after the third trial payment in XX/XX/XXXX? 

Why would our Loan Modification be cancelled long after we accepted and satisfied the terms of the agreement? 

Why would we be told not to make a payment by your institution if we there was going to be a negative impact to our loan or loan status? 

I am sure you understand our frustration at what must be a colossal mix-up of documentation- as this has been a Flagstar delinquency from the start. To resolve the problem, I would appreciate you find a solution to honor and modify the terms to reflect the 3 % interest rate we locked in when we began this modification term in XXXX of XXXX and to modify the terms to bring our account current today. If this means Flagstar has to modify the monthly terms to bring us current, then we expect that you will do that in good faith as we should not have to continue suffering, in loss, hardship, credit damage, or delinquency, in any way due to Flagstars failure to follow-through. 

We are homeowners in good standing and have merely been wanting to pay our mortgage and plan to continue to stay in the property and continue to pay our mortgage. Surely we are the type of borrowers your bank and portfolio would want to continue doing business with. 

Our account should reflect through your internal records the number of attempts made by us to continuously rectify this situation. We look forward to your timely response, so as to this point we have zero response or call back from anyone from any department at Flagstar, namely the closing and/or escalations team ( s ) at Flagstar. 

I look forward to your reply and a resolution to my problem and will wait until ( XX/XX/XXXX ) before seeking help from the Consumer Protection Agency, Consumer Financial Protection Bureau, and the Better Business Bureau. Please contact me at the above address or by phone. 

Sincerely, XXXX XXXX Enclosure ( s ) : Loan Details, Payment History, Third Party Authorization, Loan Modification Offer with signed Modification Terms, Email of original LM Doc and Email of Accept Modification Agreement