Consumer complaint received 2018-05-08
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Flagstar Bank, N.A. (CA)

I purchased my home on XX/XX/XXXX. I purchased a primary residence with a 20 % down payment and my fico score was a XXXX at the time of the purchase. I received the financing through Flagstar Bank. I contacted Flagstar via telephone on XX/XX/XXXX to ask them for instructions on how to recast my loan because I was going to make large principal payments. I was told I needed to send an email to XXXX. I sent an email on the same day requesting instructions on how to recast my loan if I make large principal reductions. I received the following response, " Please contact the Special Loans department with your loan number and property address so that the loan can be reviewed for eligibility within the next 30 days. This information can be provided to the Special Loans Department at XXXX or submit a re-amortization eligibility request form available on the Flagstar Bank website. '' When I received this response I replied immediately with the information requested. I then received the following message the next day from Flagstar, " The loan can not be reviewed for eligibility for a re-amortization at this time. In order for the loan to be reviewed to determine eligibility for a re-amortization, the following requirement must be met. The Special Loans Department must liaison with another department in order to evaluate your loan. This is a procedure that must be completed due to the fact that your loan was recently set up in our servicing system.Please contact the Special Loans department with your loan number and property address so that the loan can be reviewed for eligibility within the next 30 days. ".

I waited over 30 days as instructed and then on XX/XX/XXXX I sent another email to XXXX explaining I had made large principal payments and that I wanted to recast my loan. On the same day I received a response stating my loan was still not eligible for review. I immediately called the representative 's information that was at the bottom of the email, XXXX XXXX. I talked to her and I asked her why my loan was still not eligible for review. She told me the loan had not been placed with an investor which is why Flagstar could not tell me if my loan was eligible for the recast because it depends which investor Flagstar placed it with. I asked XXXX to please send an email to the manager of the department that sends the loans to the investors to make sure my loan was sent to an investor that will allow the recast. I advised her to please bring to the department 's attention that I have a XXXX fico and that I put a 20 % down payment for my purchase. As a result, Flagstar should have no problem placing my loan with the best investor that would allow me to recast. She said she will send the request. A couple weeks passed and I called XXXX once again to follow up with my request. I left her a message and she called me back the same day. She told me that my loan had not been placed with an investor yet and I asked her once again to contact the manager in that department to make sure my loan gets placed with the correct investor that will allow me to recast. Then on XX/XX/XXXX I received an email from XXXX stating my loan was placed with an investor that does not allow loans to be re-amortized. I called XXXX immediately and I asked her if she had sent the requests I asked her to send and she said yes but unfortunately my loan was still placed with an investor that did not allow a recast. I then asked her to escalate this to another manager and I sent her an email stating my frustration and concern. She forwarded my email to her managers but she called me back after a few days and said there is nothing that can be done. I believe Flagstar was only concerned with selling my loan to an investor that was the highest bidder and they did, and in the process completely disregarded my request and did not do what was best for their customer and his family. I was in communication with Flagstar very early in the process to make sure I would be able to recast my loan but I was overlooked and disregarded because I am sure Flagstar was only focused on making as much profit on my loan as they could possibly make. My original loan amount was {$610000.00} and I have now paid the balance down to {$460000.00}. Now due to the restriction Flagstar has placed on my loan I can not lower my payment with a recast, which would benefit my family financially, and Flagstar has put me in a very bad position. Now the only way I can lower my payment is by refinancing but this puts me at a disadvantage as a consumer because I will lose my interest rate of 3.875 % and I will have to pay approximately {$3500.00} to refinance my loan. The new interest rate I will be forced to get to lower my payment through a refinance will be approximately 4.5 % to 4.875 %. This is unfair and unjust for me an my family. My family and I work very hard to pay down the principal of the loan to allow us to lower our mortgage payment to relieve the financial pressure of making a large mortgage payment every month. I get paid with 100 % commissions and the reason we need to recast whenever we lower the balance is because we prepare for any seasons where my business may slow down. If the payments are too high during my slow season we are at risk of having to fall behind on the mortgage payments.