Our story began a little over two years ago. We refinanced and the mortgage was sold to Flagstar Bank. We paid our mortgage insurance up-front for the first year. The following years were suppose to be escrowed along with our property taxes. The first year the insurance was paid out of escrow went fine. That is the last good experience we had with Flagstar.
In the middle of 2008 we received a bill from our insurance agent indicating we owed $21. We contacted the insurance agent and were told they had received a payment from Flagstar so everything was fine. We didn't get anymore letters so we didn't take any further action. The beginning of Dec 2008 we received a letter from the insurance company stating we owed $59. We called the insurance agent and were told Flagstar had short-paid the insurance bill for 2008. We contact the customer service department of Flagstar. We were told they had not received any correspondence from our insurance company since the escrow was set up. For this reason, they continued to pay the same amount every year. In order to verify the insurance company had mailed the bill to the correct place, we asked for their mailing address. We were told Flagstar does not accept any policy changes by mail. Everything had to be faxed. I pushed for the address and verified the address matched the one the insurance company had been sending the bills. In order to fix the problem, I had the insurance company fax a copy of the bill for $59 and the updated 2010 bill to the agents computer. We were told it would be taken care of. Yeah, right....
A few weeks later we received a call from the insurance agent indicating our policy was canceled for non-payment. We were shocked, considering the trouble we had gone through to fix the issue. When we contacted Flagstar, we were told a very different story. Basically, the agent I spoke to had lied. Flagstar had received the insurance policy changes. They just didn't know how to read the statement. Flagstar was not accustom to dealing with this insurance agency I guess. Still, no one at Flagstar acknowledged fault for our policy being canceled. We decided to reinstate the policy by paying the $59 out of pocket. Again, we contacted Flagstar to ensure they were going to be making the 2009 payment on time and for the right amount. They seemed to have the right information at the time.....again, yeah, right!!
Just after the first of the year, we received a call from our insurance agent. Apparently, they never received the check for the 2009 policy. Our insurance was canceled again with no way to reinstate the policy. When we contacted Flagstar, we were told a stop payment had been put on the check. We had not authorized it so we were very confused. We were told our account was on hold, no money would be paid out. When we asked why, we were told "I don't know" by the customer service agent at Flagstar. We found out, and it was shocking....
In the end of December 2008, we received a call from a mortgage consultant at Flagstar. He was offering to refinance at a much lower rate. We asked him to send us some information by mail and gave no definite answer. Apparently, that wasn't acceptable. The mortgage consultant was the one who authorized the stop-payment and put our account on hold.
Because of these events, we have no mortgage insurance and in 28 days Flagstar will select a policy for us. The policy covers much less than our previous policy and costs over $1000 more. We are hoping our previous insurance agency will take pity on us and allow us to reinstate again once they find out what has happened. Every time we contact Flagstar, we get more and more run around and less results. We would like to refinance with a different company. Unfortunately, because my husband receives part of his pay as tax-free Per Diem, and because our home is a manufactured home on a foundation, we have few options.