Flagstar Bank requiring personal banking account

General Real Estate Investing
5yFollow

Flagstar Bank requiring personal banking account

Gregory SchwartzBusiness Member
Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes

This is a new one for us.

We received a notice from Flagstar stating that starting in January 2021 they will no longer be accepting mortgage payments from business accounts. We set up business accounts for each of our properties (this is the only one with Flagstar). The mortgage is a conventional primary residence for our 4 plex that we house hack. 

It seems ridiculous to us that a bank would not allow payments to come from a business account. 

[email protected]443-812-0357
Schwartz Realty Group5118 Reviews
WebsiteView Page
0Reply
202 views

Most Popular Reply

Allan Smith
Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
5y

As a work around, you could use billpay to automatically send a recurring check in the mail each month. I suppose they would not know what kind of account issued the check, right?

1Reply
See this reply in the discussion

15 Replies

Jump to latestLatest
  • Mitch Messer
    Lender · Playa del Carmen, México · Member since 2014 · 2k+ posts · 1k+ votes
    5y

    Hi @Gregory Schwartz! We manage properties with mortgages from Flagstar and have received no such notice. Was this mailed or sent to you via email?

    Can you share a copy of the notice here in the thread (with sensitive info redacted, of course)? That would be very helpful!

    0Reply
  • Izzi S.
    Berkley, MI · Member since 2015 · 29 posts · 3 votes
    5y

    @Gregory Schwartz I have gotten those alerts as well.

    I am going to see if my auto pays stop and go from there.

    I guess worse case I open a personal account and fund it each month.

    0Reply
  • Sunil Garg
    Investor · Montreal, Quebec · Member since 2020 · 29 posts · 6 votes
    5y

    Just out of curiosity is the mortgage registered personally or to a business?  If the mortgage is registered personally would make sense they don’t take a payment from a business account.  If the mortgage is registered to a business then it makes no sense.

    For us, we have one account for our LLC. All payments regardless of the bank the mortgage is at go out of that account. Not sure you would need a separate account for each property if they are registered to the same LLC or person.

    0Reply
  • Izzi S.
    Berkley, MI · Member since 2015 · 29 posts · 3 votes
    5y

    @Sunil Garg My loans are in my name personally.

    0Reply
  • Sunil Garg
    Investor · Montreal, Quebec · Member since 2020 · 29 posts · 6 votes
    5y

    @Izzi S.

    That may explain why they won’t take from a business account.  Simplest thing is to ask your bank manager.  They are usually quite forthcoming with explaining the changes.

    0Reply
  • Allan Smith
    Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
    5y

    As a work around, you could use billpay to automatically send a recurring check in the mail each month. I suppose they would not know what kind of account issued the check, right?

    1Reply
  • Izzi S.
    Berkley, MI · Member since 2015 · 29 posts · 3 votes
    5y

    @Allan Smith That’s a good idea. What service can send checks?

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    5y

    @Izzi S. Your bank likely offers this service free of charge. I have tenants here in CT that pay their rent this way. 

    0Reply
  • Gregory SchwartzBusiness Member
    OP
    Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Mitch Messer the notice shows up on the website when I log in. I dont have a screenshot but it seems about as legit as it comes. 

    @Sunil Garg the mortgage is in my personal name and the business account is a sole proprietorship. I get the logic of a personal mortgage being paid by a personal account but being a 4-plex I naturally want a business account. Mostly just a PIA to have to change accounts. 

    @Allan Smith i might have to try that. 

    [email protected]443-812-0357
    Schwartz Realty Group5118 Reviews
    WebsiteView Page
    0Reply
  • Mitch Messer
    Lender · Playa del Carmen, México · Member since 2014 · 2k+ posts · 1k+ votes
    5y
    Originally posted by @Gregory Schwartz:

    @Mitch Messer the notice shows up on the website when I log in. I dont have a screenshot but it seems about as legit as it comes. 

    @Sunil Garg the mortgage is in my personal name and the business account is a sole proprietorship. I get the logic of a personal mortgage being paid by a personal account but being a 4-plex I naturally want a business account. Mostly just a PIA to have to change accounts. 

    @Allan Smith i might have to try that. 

    Here's the exact language from the website:

    "Payments from business bank accounts will no longer be accepted and your business bank account currently stored in MyLoans will not be available to use as a method of payment as of 11/24/2020. If you scheduled a future one-time payment using a business bank account prior to 11/24/2020 that payment will post as scheduled. You can still make payments using a business bank account via a check mailed to Flagstar Bank or via your banks bill pay service."

    I suspect the real issue here is that Flagstar doesn't want to be responsible for determining who on a given business account is authorized to make payments, and who isn't.

    That last line of the notice validates the simple workaround that Allan Smith proposed. My bank (SunTrust) can issue a check via their bill pay service within 48 hours on a rush.

    1Reply
  • Izzi S.
    Berkley, MI · Member since 2015 · 29 posts · 3 votes
    5y

    @Mitch Messer

    Heads up - it seems my auto pay is still working

    1Reply
  • Diana Villalon
    Kailua-Kona, HI · Member since 2018 · 45 posts · 9 votes
    5y
    I just refinanced my personal loan out of Flagstar, but while I had it, i used the billpay from my bank account, never used the their autopay option. And yes, never had an issue with it. My last payment to them was in Dec 2020, if they changed their policy after, then it was good timing for me, but it's good to know as my boss has a personal loan that I pay through the company. I'll check this out Monday. Great info
    1Reply
  • Gregory SchwartzBusiness Member
    OP
    Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Diana Villalon and @Mitch Messer bill pay for the win! Thanks for all the help

    [email protected]443-812-0357
    Schwartz Realty Group5118 Reviews
    WebsiteView Page
    1Reply
  • Rick Novotny
    Investor · Kansas City, MO · Member since 2015 · 128 posts · 89 votes
    5y

    I have 4 mortgages with Flagstar. One is for my personal portfolio and 3 of them are for my LLC. However, the ones in the LLC were moved over after the mortgages were in place, so the loans are in my personal name. My autopayments from my business account have not been stopped and my bill pay checks are going through too. So basically I'm double paying my mortgages for those three properties right now. I'm super confused with what's going on and the support is no help saying the autopayments 'should cancel soon', but we're way past the date they said now. Should I just cancel my bill pay checks that are being sent from my business account and let the autopayments take it's course? Obviously I don't want to miss a payment and ruin my 800 credit score.

    0Reply
  • Jackie Knox
    Investor · Tulsa · Member since 2019 · 2 posts · 0 votes
    5y

    I am having the same issue and have ignored their "deadlines".  They are still drafting from my business account 6 months later.  I did get a letter in the mail stating that my August 2021 payment will be cancelled. I called and asked the reasoning for it and was told they had no explanation, it was simply a business decision. If it wasn't such a hassle I would refinance with someone else. They said I could mail in a check from a business account. womp womp........  

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free