Consumer complaint received 2024-03-09
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Paying off the loan
Company: NEW YORK COMMUNITY BANCORP INC (TX)

We recently made the decision to pull cash out of the equity on our primary residence. Flagstar refused to coordinate a re-finance with cash-out, so we opted to open a new loan with XXXX XXXX. Therein began our new troubles with Flagstar. Here is the sequence of events : ( XXXX ) Early XX/XX/XXXX, XXXX XXXX  made a formal request to Flagstar for a payoff quote, to include the principal loan amount plus escrow balance. Flagstar complied, and a quote was issued in the amount of {$380000.00}, valid through XX/XX/XXXX. 

( XXXX ) Closing with XXXX XXXX  / XXXX occurred on XX/XX/XXXX, at which time it was communicated that they would be issuing the payoff to Flagstar within a few days. 

( XXXX ) XXXX XXXX  transferred {$380000.00} to Flagstar by wire transfer on XXXX. 

( XXXX ) Flagstar claims the payoff quote is no longer valid, declines the payoff, and allegedly sends the full amount back to XXXX XXXX  by wire transfer on XXXX. 

( XXXX ) On XXXX, I receive a notification from XXXX that Flagstar has reported that our mortgage account balance has increased from {$380000.00} to {$380000.00}, nearly {$4000.00} higher. 

( XXXX ) I immediately call Flagstar to inquire, and they claim that there was a {$4000.00} deficit on the escrow account, and that this so-called deficit was not included in the original payoff amount. This deficit is, in fact, irrelevant because ( and Flagstar knows this ), our XXXX account was closed as part of the re-finance, as we switched our policy to XXXX XXXX. 

( XXXX ) On further inquiry to XXXX XXXX  on XXXX, they indicate that no wire transfer refunds/ returns had come through from Flagstar. They also confirmed that the original payoff quote was requested for inclusion of escrow, as a **standard** practice.

( 8 ) On the phone call with Flagstar on XXXX, I indicated that I would need to report this problem to CFPB, to which they responded that there would probably be a delayed resolution of the issue, given their need to involve their legal team.

As a result of Flagstars non-standard, possibly unethical, mortgage banking practice, we now have XXXX active mortgage accounts. This will not be the first complaint I have filed against this bank. As I stated in XXXX, I believe Flagstar purposely leverages delays in transaction timelines to incur fees, force foreclosures and in other ways derive profits. That said, I admit I do not understand what they have to gain from declining a payoff and reporting my account to XXXX ( from my perspective, violating the FCRA ), What is most troubling about this Flagstar interaction is their claim to have returned funds to XXXX XXXX on XXXX without every having actually done so. Further, it also seems unethical to withhold escrow balances from payoff quotes, only to increase the total loan balance later with the deficit.

All in all, I thought it necessary to alert the CFPB to Flagstars behavior in the hopes that other consumers in my position could be saved of these troubles in the future. At this time, I do not have an active resolution, and as with my complaint from XXXX, Flagstar is holding this escrow deficit over my head and the delays from engaging CFPB as potential future leverage for additional fees, collections, and credit reporting.

In other words, Flagstar is up to their old tricks again. I do hope we can finally get them in line. Needless to say, I will never so much as look in their direction again, and I aggressively dissuade anyone and everyone from using them. This bank is nothing but trouble and headache, from start to finish.