Consumer complaint received 2021-04-29
Product: Mortgage — VA mortgage
Issue: Struggling to pay mortgage — 
Company: Flagstar Bank, N.A. (CA)

I am a 100 % service connected XXXX XXXX XXXX XXXX XXXX who is unable to work and with special medical needs in a 30 yr VA LOAN with Flagstar Bank that has a payment of XXXX at XXXX. I have owned my home since XXXX and have never missed or been late on a payment with my Flagstar or any of my other creditors. In XX/XX/XXXX my family experienced a horrible disaster when our home was completely destroyed in an accidental fire. We lost everything, our home, all of its contents and all personal belongings including clothes which would lead to a serious financial hardship. Due to an insurance issue, we would be required to pay for the full rebuild and replacement of all belongings out of our own pockets while also covering all necessary living expenses while our home was being rebuilt. We applied for and would be approved for a forbearance plan that suspended all payments until we were back in the home. 

After a year and a half and as the construction on our home was winding down we submitted another modification application to address the payments that were suspended while we rebuilt the home. We submitted the application on XX/XX/XXXX and would follow-up weekly to check on the status of our application. After almost two months we finally learned of a decision on XX/XX/XXXX that offered a trial plan with 3 payments of XXXX and an interest rate of XXXX. In reading the offer and all of the information in the packet that was included, we were told that we could accept the terms and concurrently appeal to have the offer reviewed for better terms. We immediately submitted an appeal outlining our situation and asking for a review of the interest rate to see if it could be lowered. We felt that the increase of our interest rate was wrong considering our strong mortgage payment history and the facts of our specific situation of this being a tragic disaster that caused my family to lose everything and not just the home. While we are able to resume paying our mortgage, we are still experiencing a long-term financial hardship as we work to replace all of our belongings. This unnecessary increase in our interest rate at a time when mortgage rates are super low is almost criminal considering our strong credit history with our mortgage and Flagstar. While following up on the appeal because 30 days had lapsed and we hadnt heard anything, I was informed that the appeal was denied with only a statement that you cant appeal the interest rate. 

We feel that Flagstar is preying on us and taking advantage of us at a very vulnerable time. I have tried multiple times to address the situation with Flagstar and to no avail, Ive only received lip service but no objective details as to how they came to these terms. There was nothing in the decision packet we received that said what you couldnt appeal. The packet only stated that if you didnt like the terms offered you could appeal them to request that they be reviewed. This is wrong and I have requested to escalate this situation for management review multiple times, but it seems like my requests have repeatedly been ignored. As a result I am asking for CFPBs assistance in reaching someone with Flagstars leadership. 

Our home had an estimated market value of XXXX before the disaster. Since completing the rebuilding of the home we have been advised that our new home has a strong and solid market value of between XXXX XXXX