Consumer complaint received 2022-02-27 00:00:00
Product: Mortgage — FHA mortgage
Issue: Trouble during payment process — 
Company: Flagstar Bank, N.A.
State: GA

Complaint narrative:
I believe Flagstar Bank violated 12 CFR Section 1024.35 by not paying my insurance premium from my escrow account. They were given an opportunity to correct and agreed to but did not honor agreement, which resulted in higher insurance premiums and higher mortgage payments, and assorted related expenses outlined in the following timeline, documentation is referenced and provided. 

1 XX/XX/XXXX My family 's auto insurance increased by {$210.00} per 6 month term. 
XXXX XXXX XX/XX/XXXX I contacted my insurance broker, XXXX XXXX and questioned insurance bill. They informed me since my auto and homeowners insurance were bundled, my auto insurance had increased because my homeowners policy had been cancelled on XXXX *Cancellation notice from XXXX XXXX XX/XX/XXXX I informed XXXX XXXX that the insurance was escrow billed and I had no control over that. XXXX stated that the loan had been purchased by Flagstar Bank and they had not paid the insurance payment. I stated I assumed they paid the taxes which were also escrow billed as I had not been informed otherwise. 
XXXX XXXX notes from XXXX XXXX XXXX Page 1.

4 XX/XX/XXXX Contacted Flagstar Mortgage XXXX they in turn had XXXX contact XXXX XXXX to see if policy could be reinstated. 

XXXX XX/XX/XXXX I was contacted and told that I needed to go to XXXX XXXX and sign a No Loss Document that day. I did that. 
*Notes from XXXX XXXX pg 2 & 3, completed and signed No Loss Statement, and copied Fax Cover Sheet. 

XXXX XX/XX/XXXX I spoke with XXXX XXXX XXXX XXXX XXXX she said she had spoken to XXXX at XXXX XXXX XXXX XXXX XXXX XXXX, and that he had said XXXX would reinstate the policy if I signed the No Loss Document and if Flagstar Mortgage expedited the payment. XXXX stated she had explained this to XXXX and it was agreed upon. I did not make payment myself because issue was settled. 
XXXX XXXX notes from XXXX XXXX XXXX Page 1. 

XXXX XX/XX/XXXX I received letter from Flagstar Mortgage asking me to provide insurance information because their records said my insurance had expired. 
XXXX letter Requesting XXXXnsurance Information 8 week of XX/XX/XXXX I followed up with XXXX XXXX XXXX XXXX to see what happened as per our agreement with Flagstar . She informed me XXXX had not received any payment from Flagstar and that I had no insurance. 
XXXX notes page 4 9 XX/XX/XXXX I called XXXX XXXX XXXX XXXX informed me my policy was no longer eligible for reinstatement and will have to be rewritten with a lapse surcharge of {$300.00} plus the new policy will be more expensive than original policy because of lapsed status due to no payment. I took no action. 
XXXX notes page 5 & 6 - {$300.00} XXXX XX/XX/XXXX I contacted XXXX at Flagstar, she called XXXX at XXXX XXXX who informed her of the situation. XXXX said XXXX will escalate with her supervisor. 
XXXX XXXX page 7 11 XX/XX/XXXX I received notice of Lender Placed Hazard insurance beginning XX/XX/XXXX for the amount of {$2000.00}, which is {$1000.00} more than the XXXX policy of {$930.00}. 
* Notice of Lender Placed Hazard Insurance, page 1.

* Projected Escrow Surplus - {$1000.00} XXXX XX/XX/XXXX Received Escrow account statement from Flagstar Mortgage showing a surplus of {$520.00} *Escrow account statement 13 XX/XX/XXXX I received Annual Escrow statement from Flagstar Mortgage showing how Lender Placed Hazard Insurance depleted escrow to a shortage of {$2100.00} from a surplus of {$520.00}. 
XXXXAnnual Escrow Account- {$2600.00} XXXX XX/XX/XXXX Annual Escrow Statement shows increase of monthly mortgage from {$960.00} to {$1200.00} in order to refill escrow account and pay the difference in premium. 
{$300.00} x 12 monthly payments = {$3600.00} - {$3600.00} XXXX XX/XX/XXXX XX/XX/XXXX, pre-approved offers to refinance loan to eliminate mortgage insurance payment on FHA loan. 
{$150.00} x 12 monthly payments = {$1800.00} - {$1800.00} XXXX *Flagstar Bank Transaction history demonstrating no late or missed payments TOTAL ACCRUED INCREASE OF EXPENSES - {$9600.00} Pay all penalties plus reverse interest accrued on account due to forced placed homeowners insurance ALL NOTED DOCUMENTATION AVAILABLE UPON REQUEST

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