02/09/2021: RECAP - Understanding Payment Handling Post-Transfer for Flagstar Bank Bulk Sale Loans

There are special payment handling scenarios as well as the typical payment forwarding process as a result of the bulk sale transfer to Flagstar Bank.  It is important to understand the below recap of how all of these payment scenarios should be handled and explained to customers.  


Scenarios include:

  • Checks received at Fairway (ServiceMac) on or after February 1, 2021 being forwarded for 60 days post-transfer (through March)
  • Bill pay and/or online banking payments 

o   Electronic bill pay payments returned to bill pay provider

o   Physical bill pay checks forwarded for 60 days post-transfer

  • Customers who entered a (confirmed) payment on My Fairway Servicing Mobile App January 29 – February 1 but payment did not process and is due to Flagstar Bank


Always make sure to obtain sufficient detail from customers in order to correctly understand how they remitted their payment to Fairway, in order to provide customers with accurate information/instructions regarding their payment handling.


Checks received at Fairway on or after February 1, 2021

Customers in this bulk sale population who remit a payment by check to Fairway on or after the February 1, 2021 transfer date should be advised their check will be forwarded to Flagstar Bank automatically for a period of 60 days after the transfer effective date.  This is a standard servicing transfer process.

  • RESPA requirements protect customers from being assessed late fees and prevent negative credit reporting for this 60-day period 
  • After the 60 day post-transfer period ends, Fairway will return checks received to customers with a letter advising of the bulk sale servicing transfer
  • Inform customers who paid by check they must remit payments directly to Flagstar Bank going forward and to watch for their monthly billing statement from Flagstar Bank


View the RESPA protections and check payment forwarding information in the training presentation – Click Here and go to Page 3 of the presentation.


Bill pay and/or online banking electronic payments rejected

Customers in this bulk sale population who remit a payment through online banking or a third-party bill pay service to Fairway on or after January 29, 2021 will receive an email or letter advising their funds are being returned to their bill pay provider if their funds are remitted electronically.  


Bill pay and/or online banking payments by physical checks to be forwarded

Customers whose online banking/bill pay remit their payment with a physical check will have the check forwarded for 60 days from the February 1, 2021 transfer date to Flagstar Bank (through end of March).


Make sure to discuss with all bill pay/online banking customers the importance of updating their bill payee information to reflect their new servicer, Flagstar Bank.  


Provide the following:

Pay to the order of: Flagstar Bank

Reference: Flagstar Loan Number

Mail to/reference: Payment Processing Department

Flagstar Bank, P.O. Box 660263

Dallas, TX  75266-0263


Click Here to view the procedure for viewing the payment batch code in MSP to determine if bill pay/online banking payments were received electronically or by a physical check.


Customers who entered a (confirmed) payment on My Fairway Servicing Mobile App January 29 – February 1 but payment did not process

Customers in this bulk sale population who entered a payment on the My Fairway Servicing mobile app from January 29, 2021 – February 1, 2021 will not see funds for this payment entry deducted from their bank account.  These payments will not process. 


Customer talking points:

  • Advise these payments will not process even though a confirmation number was provided
  • Assure these customers that funds for this payment will not be deducted from their bank account
  • Inform these customers to make this payment directly to Flagstar Bank
  • Remind customers of the 60 day RESPA protection preventing assessment of late fees and preventing reporting of late payments to the credit bureaus
  • These customers will receive an email advising this payment will not process with Fairway and needs to be made directly to Flagstar Bank


Click Here to view the detailed information on this topic and the loan level list of impacted customers in KnowledgeOwl.