Flagstar Bank Does Not Honor Tax Option One in Wisconsin

This information applies to loans originated in Wisconsin and transferred to Flagstar Bank.

Flagstar Bank does not honor Tax Option One (tax disbursement from escrow made payable to both the customer and the tax office) for loans they service in Wisconsin.  

Flagstar Bank codes all Wisconsin loans as Tax Option Two – meaning they will disburse tax payments in the month of December to be paid directly to tax offices, except for any Wisconsin loans where semi-annual tax payments may be due to tax offices.  

This has caused concern for some customers and loan officers on loans originated by Fairway with Tax Option One then transferred to Flagstar Bank and set up with Tax Option Two.  

  • Advise customers and loan officers of the above referenced information
  • Impacted customers should contact Flagstar Bank – as their current servicer – for more information or to further discuss this matter by calling toll-free (800) 968-7700 or visit their website: https://www.flagstar.com/personal/my-loans.html

Please see your supervisor or manager if you have questions.