Consumer complaint received 2021-09-30
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — 
Company: Flagstar Bank, N.A. (CA)

My wife had a XXXX in XXXX, and then a second XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXX, XXXX. She was on XXXX with her employer of 24 years as covid hit in the month of XXXX, and XXXX XXXX shut down. My income as a XXXX XXXX XXXX for a XXXX in XXXX was immediately impacted by statewide business closures, across all industries. My income from XXXX, XXXX until I was laid off in XXXX, XXXX was my lowest annual total since the recession years of XXXX and XXXX. 

Flagstar Bank reached out to me to offer their forbearance plan in XXXX, XXXX, and we gladly accepted their offer to make our ends meet as covid. 

After 18 months of deferral of our payments without negative credit reporting or penalties, we aim to continue with a loan deferral option, but are being denied that option and asked to consider a balloon payment or payments three times our normal amount for 6 or so months to come current, or consider a 40-year term loan modification. We wish for loan deferral, and have mentioned such consistently for the entire 18-month period, since my first conversation with Flagstar representatives and now repeated in nearly two dozen conversations since. 

We had paid 7.5 years on our 30-year mortgage, starting on XX/XX/XXXX. As a former mortgage loan agent, I am acutely aware that as of our XXXX, XXXX payment, {$810.00} of that month 's {$1900.00} payment lowered our principal balance, more than 42 % of our payment. We consider this a forced savings toward our retirement, something we were literally " banking on '' prior to this covid-induced situation, and a lesson I am teaching my children regarding financing of homes, as that equity may well be a large portion of their inheritance. 

With over {$500000.00} in equity in this property and at ages XXXX  and XXXX we refuse to consider a refinance or to modify our loan, which would revert us back to nearly every payment going to bank interest for the next several years. The bank 's request that we consider a loan modification to a 40-year term is appreciated, but viewed as an unacceptable option. I declined the offer at the moment the numbers were shared with me verbally, before they even printed the offer to send it to me in writing. 

Work and Income during Covid My wife returned to work in XXXX, XXXX, was furloughed 2 weeks later, returned to work in mid-XXXX, and then was laid-off after 24 years with her employer in XXXX. Her last paycheck was received XX/XX/XXXX. As an in-demand XXXX XXXX XXXX she has accepted two XXXX jobs since her layoff ( each lasting two to three months ), and starts a third full-time XXXX job on Monday, XX/XX/XXXX. 

I was laid off after 15 years with the XXXX without severance on XX/XX/XXXX. I am seeking employment and have three advanced interview processes pending with potential employers. I anticipate full-time employment no later than XX/XX/XXXX. 

Flagstar Bank offered the forbearance plan in XXXX, XXXX, extended that term with an offer in XXXX, XXXX which we accepted, and then again in XXXX, XXXX to extend into XXXX. My first payment off of the program is to commence on XX/XX/XXXX, and i have requested we be set up to do so, but the bank is offering me either 6 months of payments at over {$7.00} a month to catch up, or to make one lump sum payment of {$36000.00}. Did they not understand that we just were under financial XXXX for the past 18 months? How could we afford to make either of those options happen? 

We were involved in a class action lawsuit, having been affected by the XXXX XXXX and its dense smoke in XXXX. We received funds targeted for much needed repairs to the home to keep our investment secure and to deal with ongoing medical bills for XXXX 's XXXX XXXX. We have not engaged the pension she is to receive from her 24-year employer, as she turns XXXX in XXXX, XXXX, and we are balancing how best to time its start date. 

We are willing and able to utilize our savings to meet XXXX costs of over {$1200.00} a month until my wife reaches XXXX next XXXX, and I do the same in XXXX of XXXX. Secure employment will eradicate that necessity, so we are anxious for that to occur soon. We have no other debt, so look forward to meeting our financial dilemmas with XXXX if we can get agreement for continuing with our mortgage payments of {$1900.00} to survive until our medical costs go down with medicare next XXXX ( wife ) and a year from this XXXX ( me ). 

Please assist us in obtaining a loan deferral option, as we are prepared to meet that commitment.