Bad custom encryption
From the way I understand your question, your encryption scheme works as follows:

For a message consisting of $\ell$ blocks $m=m_1\|\dots\| m_\ell$ and a key $k$ the ciphertext $c=c_1\|\dots\| c_\ell$ is computed as 
$c_1:=m_1\oplus H(k)$ and $c_i:=m_i\oplus H(c_{i-1},m_{i-1})$ for $2\le i \le \ell$.

This scheme has several problems. First of all it's deterministic and therefore cannot be CPA secure, the basic minimum we generally require of an encryption 
 scheme.

But it gets worse. In any standard definition of security, it is assumed that the attacker can choose, or at least know, parts of the plaintext. In your scheme, if the attacker knows the $n^{\text{th}}$ plaintext block $m_n$, they can compute $H(c_n,m_n)$ and thereby reveal the next plaintext block (and by extension the rest of the message).