Magazine article American Banker

Servicing's Dubious Distinction: Most Mortgage Complaints to CFPB

Magazine article American Banker

Servicing's Dubious Distinction: Most Mortgage Complaints to CFPB

Article excerpt

Byline: Austin Kilgore

Problems related to loan servicing dominate the consumer complaints about mortgage companies made to the Consumer Financial Protection Bureau, but an agency official expressed optimism about the industry's response to these grievances.

Since its launch in June 2012, mortgage-related complaints account for nearly one-third of the more than 538,000 grievances published in the CFPB's public database.

Among the roughly 162,000 mortgage-related complaints, 55% were related to problems when consumers are unable to pay, and 29% of complaints involved consumer issues with making a payment (consumers self-identify the nature of their complaints). Meanwhile, consumer issues with applying for a mortgage accounted for 8% of complaints, and 4% are issues with loan closings.

The CFPB weeds out bogus complaints (but does not verify the accuracy of allegations), and forwards legitimate ones to financial institutions for a response. Companies get 15 days to respond before the complaint is published in the online database. About 88% of mortgage complaints have been sent to lenders and servicers for a response. Of those, mortgage companies have responded to 97% of complaints, said Scott Steckel, who oversees stakeholder engagement in the CFPB's Office of Consumer Response.

"Every complaint that we receive gives us and companies insights into the problems that consumers face," Steckel said during a panel at the Mortgage Bankers Association's annual servicing conference, ongoing this week in Dallas. …

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