Consumer complaint received 2020-01-22 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Flagstar Bank, N.A.
State: FL

Complaint narrative:
Flagstar Bank habitually and routinely mishandles the escrow account on my mortgages. I have two mortgage accounts ; one is for my primary residence, and one is for a rental property ( a duplex ). Both mortgage accounts are with Flagstar. There is windstorm insurance and hazard insurance on the primary residence ( 2 policies ). There are 2 windstorm policies and one hazard policy to cover the duplex ( 3 policies on the rental ). During a routine review of my escrow account on XX/XX/XXXX, I discovered that Flagstar had paid one of the windstorm policies for the rental property out of the escrow account for the personal property ( {$1800.00} ) ; effectively, they had stolen money from one property to pay for insurance for the other. I called immediately, and spoke to an agent in the insurance department named XXXX. He assured me he would correct the misappropriation of funds. 

I then received a letter from Flagstar dated XX/XX/XXXX indicating the hazard insurance on the rental property had expired. Because Flagstar escrows that money, I checked online to see if they had paid it or not. I saw an insurance payment from escrow in the amount of {$1700.00}, so I called my insurance carrier on XX/XX/XXXX to make sure they had received it. They had not, and they informed me that would not have been the correct amount anyway. I immediately called Flagstar and spoke to XXXX in the insurance department. She discovered that the payment of {$1700.00} had actually been sent to the windstorm carrier, not the hazard carrier. Evidently, XXXX had not put the money back into my primary residence escrow account as we had discussed on XXXX, but instead paid the windstorm insurance from the escrow account for the rental property ( but not in the correct amount of {$1800.00} ). Thus, the windstorm insurance had been paid twice once from the wrong account ( primary residence escrow ), and once from the correct account ( rental property escrow ) in the WRONG amount. After 1-1/2 hours, two supervisors, and two escrow examiners, I was assured this would be corrected within 24-48 hours. In addition, I connected XXXX with my insurance carrier to make sure the hazard insurance premium ( {$2200.00} ) they had missed would also be paid. It was paid that same day ( XXXX ). 

On XX/XX/XXXX, I received a refund check from the windstorm company in the amount of {$1700.00} ( apparently, XXXX had reached out to them after our conversation on XXXX ). I then called Flagstar to ask what to do with the check that was {$45.00} less than what they stole from the primary residence escrow account ( {$1800.00} back in XX/XX/XXXX ). I spoke to XXXX this time in the insurance division, who connected me with XXXX in the escrow division, who put me in touch with XX/XX/XXXX the supervisor. They told me to deposit the refund from the windstorm company ( {$1700.00} ) into the primary residence escrow account, and that someone would get back to me in 24-48 hours about the missing {$45.00}. 

I received another letter dated XX/XX/XXXX from Flagstar informing me that the hazard insurance had expired ( it had not paid on XXXX, and in good standing ). No mention was made of the misappropriated {$45.00} or any of the voluminous conversations or missed promises of responses ; just a threatening letter that insurance would be lender-placed on the property at my cost. I called Flagstar XX/XX/XXXX regarding this latest outrage, and spoke to XXXX. While on the phone with her, I had XXXX call the insurance carrier to get another copy of the declarations page to prove the property was indeed insured ( a declarations page had already been faxed to Flagstar previously on XX/XX/XXXX from my insurance carrier ). At that point I asked for a supervisor to deal with the still-outstanding question of the misappropriated funds. The supervisor said the windstorm carrier should have refunded the entire amount XXXX an incorrect answer ), so I asked to speak to her supervisor. After an hour and a half, I was left on hold without a response, and had to call back. I was then assured a supervisor would call back within the hour. No one did. 

On or about XX/XX/XXXX, I received a call back from a supervisor named XXXX XXXX. XXXX divined what had happened with the escrow misappropriations, and set about undoing the theft ; on XX/XX/XXXX, the {$45.00} was transferred from the rental property escrow account, and back into the residential property escrow account. 

Inconceivably, on XX/XX/XXXX I received a letter dated XX/XX/XXXX indicating hazard insurance had been lender-placed on the property at a cost to me of {$630.00}. XXXX, I called XXXX XXXX on XXXX, who was justifiably horrified at yet XXXX escrow mistake. She assured me she would reverse the charges. To her credit, she was able to have the policy canceled and the charge refunded to the escrow account on XX/XX/XXXX. 

While on the phone with XXXX on XXXX, I began the process of getting an escrow waiver because of the utter incompetence exhibited by Flagstar in administering this simple account ( Case # XXXX ). My request languished in a call-back queue until I contacted Flagstar on XX/XX/XXXX ; I was told that I had not submitted the proper form, despite the fact that I had been working with a supervisor at the bank to begin the process, and was never told to submit a form. Nevertheless, I then immediately filed the form. Follow-up calls on XX/XX/XXXX and XX/XX/XXXX revealed that although the form was at least now in the system, nothing had been done about it. Even the very-competent XXXX XXXX has been unable to break the log-jam, and I am now hoping for a regulatory intervention to end this madness.

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