Flagstar Policy on Paying Supplemental Tax Bills

This Policy Was Updated on April 19, 2022 Permitting Fairway Originated Customers Transferred to Flagstar Bank To Request Payment Of Supplemental Taxes Using Funds From Their Escrow Accounts.

When California property values increase for purpose of property tax assessment (creating a supplemental tax bill) for mortgage loans on purchases of new construction and purchases of existing homes where change of ownership occurs, customers whose loans are serviced by Flagstar Bank now have the option to request for their California Supplemental Tax bill to be paid through their escrow account (instead of the customer paying these amounts directly to the taxing authority).

Flagstar Bank has updated their guidelines and is currently mailing/emailing letters of explanation to all existing California Fairway originated customers whose loans closed within the last year.  This letter provides the required steps these customers must take to request payment of their Supplemental Tax bill with funds from their Escrow account.  

Going forward, this letter will be mailed/emailed by Flagstar Bank to all new California Fairway originated customers.

Click Here to view a copy of the letter/email referenced above to be sent from Flagstar Bank.

Make sure to share these details with these California customers, and let them know to watch for this referenced letter/email.  New Servicer information is available to your customers and to you once the loan is sold by viewing www.FairwayNEXT.com.

This letter/email from Flagstar Bank instructs customers to take the following steps:

  • Customers must submit a copy of the Supplemental Tax bill, their loan number, amount due and due date, by email to Pay.Supplemental.Tax.Bill@Flagstar.com or fax to (888) 236-8304 – Supplemental bills are only mailed to customers, so they must provide a copy of this bill
  • Include in the email – or in writing if submitted by fax – advising the Supplemental Tax bill is being sent to Flagstar Bank for payment with funds from escrow
  • Supplemental Tax bills must be received at least 15 days prior to the delinquent due date to ensure the bill is paid timely and without penalty
  • Supplemental Tax bills received after the delinquent date OR less than 15 days from the due date will have any penalties and interest paid from the customer’s escrow account along with the base tax amount
  • The letter advises that payment of the Supplemental Tax from the escrow account will most likely result in an escrow shortage and a monthly payment increase when the next Escrow Analysis is completed
  • Flagstar Bank will pay supplemental tax bills within 5 business days of receipt of the copy of the bill and the customer’s written request

Flagstar Bank customers may contact their Customer Service Department if they have questions by calling toll-free (800) 968-7700 Monday – Friday 7:30 a.m. to 8:00 p.m. or Saturday 7:30 a.m. to 4:00 p.m. Eastern Time.

A comprehensive job aid for this process is available in the Servicing KnowledgeOwl by searching “Flagstar Bank Supplemental Tax Bills” or Click Here.

For Fairway originated loans transferred to Mr. Cooper or M&T Bank, California supplemental tax bills will be paid by the servicer/subservicer based on the customer’s timely written request and submission of the supplemental tax bill. 

Please email Servicing911@fairwaymc.com if you have any questions.

This communication is for internal use to provide you with information to assist your customers.  This is not approved to post on social media.