Consumer complaint received 2017-10-11
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: Flagstar Bank, N.A. (NE)

I have a mortgage loan with Flagstar Bank. On XXXX 2017 we had severe weather in which my home sustained damage from a storm. My insurance company performed estimates for repairs and I selected my contractors to complete the repairs. Flagstar was listed on my insurance checks and needs to sign them before I can deposit them to pay my contractors. To get the checks signed the bank requested several documents along with the endorsed checks. One of the documents they are requesting is a XXXX from my contractor. My contractors and I do n't see the bank 's need for this document as the bank is not making payments to them but rather just endorsing the checks so I can receive funds to cover the repairs. Four checks have been issued so far. The first was for {$14000.00}, Flagstar endorsed this check and returned it. The other three checks the bank requested : XXXX, repair proposal, Borrower Affidavit, lien waiver from contractors, proof of insurance and licensing. I was able to secure lien waivers from all the contractors, which are conditional on the checks clearing but the bank wants unconditional waivers which is not possible since the contractor wants to guarantee they receive the payment in full. The process of securing these documents took a long while as my contractors stated it was not a usual process, I have had contractors decline the work due to the excessive paperwork requested by my bank. From speaking to several employees, I was given different stories. I was told if I could n't provide XXXX 's I needed the waivers other times they wanted all the documents. Currently, three checks are with the bank. I sent in documentation showing I have paid the first contractor {$6800.00} in full and a completion certificate. The bank is still withholding the checks received recently with a whole packet of necessary documentation. Today the bank emailed me and they want to perform an inspection of the work completion and then release funds but I need to pay my contractor the initial funds to cover materials. The bank refuses to send an inspector to verify the completed work and wants all work completed before any inspection. I can not move forward while they hold my insurance funds hostage.  They amount of documentation requested is more than standard and has a negative effect on me as the home owner. Winter is almost here and if it snows, my tarp will not hold and additional damage will occur to my interior space which I will hold Flagstar responsible as it is their delay that lead to this point. All I want to do is repair my house. I welcome their inspection but they have to at least release funds for materials. From the initial check I have a little over {$8000.00} which is n't close to half the cost, the roof alone was {$9000.00} before the porch, deck, gutters, window etc. The bank 's policy has a negative impact on my ability to complete repairs on time to solve this whole issue. I do n't have over {$25000.00} sitting around to pay the contractor and wait on the bank to reimburse me which is what they have suggested as a work around. I have had mortgages before and this is by far the most difficult bank policies I have dealt with on release of insurance funds for repairs. I have signed affidavit 's that repairs will be done, my mortgage is current, evidence of repairs being done is available and still they delay the process costing me time and money. My energy bills are sky high as the trap offers no insulation from heat let a lone the cold winter weather on its way. The bank 's policies are strictly to favor the bank at the expense of good consumers. I have had several discussions on this with employees and managers and nothing has improved or changed. Nobody deserve this kind of treatment when I have n't given them reason to doubt my character. My mortgage loan will be transferred as soon as this fiasco is resolved. I refuse to have a mortgage with an incompetent lender.