Consumer complaint received 2022-02-07 00:00:00
Product: Debt collection — Mortgage debt
Issue: Took or threatened to take negative or legal action — Threatened or suggested your credit would be damaged
Company: Flagstar Bank, N.A.
State: CA

Complaint narrative:
I was affected by Hurricane Irma as I lived in XXXX, Florida during XX/XX/XXXX. After the hurricane, I had fence damage and a foundation issue with my home. Therefore, I called Flagstar Bank, my mortgage company, to see what they could do. As I had some damage to my home I was hoping they would postpone some payments so that I could make the repairs. 

Flagstar informed me that they had a a deferment program which was advertised as something that would not affect credit score and would not have fees involved. The deferment allowed a customer to postpone three months of mortgage payments, but then at the end of the three month period, the deferred amount came due. I entered this program however, did not realize the payments were due at the end until I had already signed up for it. Because this program did not assist me in any way, I called Flagstar and asked if they had any deferment programs that would allow me to pay off the deferred amount over a longer period of time. Flagstar then recommended I apply for a loan modification which would build the three months of deferred payments back into the loan, which made more sense to me in my situation, as I needed the money for necessary repairs. In or around XX/XX/XXXX I applied for the loan modification. The modification was approved and I began making the new payments. 

Flagstar had me sign a document which I thought was the final loan modification agreement. At the same time, I was on a work assignment for the federal government for approximately four months in XXXX XXXX, California. When I returned home to Florida in XXXX, XXXX I found a document in the mail ( final loan modification agreement ) from Flagstar, which I signed and returned. Flagstar neither called or alerted me in their online system that there was a document I needed to sign during the months I was in XXXX XXXX on a work assignment, as I had signed on to my account multiple times to make payments. I called Flagstar shortly after sending them the final agreement to make sure they received the signed agreement and they told me that because I had taken longer than a few weeks to return the final agreement, my modification application was terminated and closed. I attempted to explain that I had made all trial payments during the trial period and into the new modification period, so it shouldn't matter that I hadn't signed the final agreement within a few weeks. I argued that as long as it was signed and I was making all of my loan current loan payments, the agreement was still in effect.

Flagstar informed me that I could then apply for a second modification which would likely be approved like the first was. However, because the first loan modification application was terminated, my property went into foreclosure status, and they reported to the credit agencies multiple months of late payments. At the same time, Flagstar refused to accept any further payments via online, telephone or mail, as they informed me that my account was frozen due to foreclosure status. I requested to make payments on multiple occasions but they refused each time. My credit went from an 830 to 675 based on the negative credit reporting from Flagstar even though I was attempting to make payments. In or around XXXX, XXXX I applied for the second loan modification per the instructions from Flagstar.

I retained an attorney to draft a demand letter to Flagstar asking for them to adhere to the first modification agreement, which was unilaterally terminated as I had been making payments during the temporary trial period. It also requested that Flagstar remove the late items they were reporting to the credit bureaus. This letter was sent via certified mail sometime in the fall of XXXX. Flagstar did not respond to the letter. The second loan modification was approved and final agreement signed around XX/XX/XXXX. I have made all payments during the modification temporary period as well as the first few payments on the new " final agreement '' schedule. 

However, Flagstar is still reporting late items to the credit bureaus for the five months the second modification was being processed. It should be noted that I attempted to make payments during this time period, however Flagstar refused to accept any payments in any form, as my account was effectively frozen. Flagstar informed me months ago that these negative items would be removed because I am now fully up to date on my payments. I have called Flagstar customer service on numerous occasions hoping they would work with me and be reasonable, to no avail. On many occasions the customer service employees have been downright disrespectful to me.

My credit score has been negatively affected by over XXXX points which has caused me financial harm including being not approved for a car loan and also not approved for an insurance policy, both companies citing credit as one of the main factors for the declination. Furthermore, Flagstar charged me approximately {$1500.00} in attorneys fees related to the modification. As a victim of a hurricane and responsible mortgagee I feel that I have been a victim of predatory lending practices as well as false credit reporting. The purpose of this letter is to document the facts and report Flagstar Bank for unethical, and possibly illegal activity related to their lending practices and false credit reporting. 

Please let me know if you need any further information. I have documented screenshots showing my inability to make payments as well as other documentation supporting the chain of events described above.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation