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Flagstar Bank requiring personal banking account
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.
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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!
@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.
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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.
@Sunil Garg My loans are in my name personally.
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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.
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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?
@Allan Smith That’s a good idea. What service can send checks?
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@Izzi S. Your bank likely offers this service free of charge. I have tenants here in CT that pay their rent this way.
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@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.
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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.
@Mitch Messer
Heads up - it seems my auto pay is still working
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@Diana Villalon and @Mitch Messer bill pay for the win! Thanks for all the help
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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.
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........