CFPB Releases 2015 Consumer Complaint Report
March 22, 2016, the Consumer Financial Protection Bureau (CFPB) released its annual Consumer Complaint Report. The breakdown of the number of complaints received for each category were as follows:
- Debt collection: 85,200
- Credit reporting: 55,000
- Mortgages: 50,800
- Other: 34%
- Conventional Fixed Mortgage: 32%
- FHA Mortgage: 12%
- Conventional Adjustable Mortgage (ARM): 11%
- Home Equity Loan or Line of Credit: 5%
- VA Mortgage: 3%
- Reverse Mortgage: 1%
Types of Mortgage Complaints Reported by Consumers
- Problems when unable to pay (Loan modification, collection, foreclosure): 43%
- Making payments (Loan servicing, payments, escrow accounts): 37%
- Applying for the loan (Application, originator, mortgage broker): 9%
- Signing the agreement (Settlement process and costs): 5%
- Receiving a credit offer (Credit decision/underwriting): 3%
- Other: 3%
- Total Mortgage Complaints: 100%
The most common topic in mortgage complaints involves problems consumers face when they are unable to make payments, such as issues relating to loan modifications, collections, or foreclosures. In particular, consumers continue to complain about delays and ambiguity in the review of their modification applications. Consumers also complained about issues they encountered while pursuing short sales or after foreclosure proceedings had been initiated. Also, consumers complain about dual tracking and express concern that the servicer is proceeding with foreclosure proceedings although their modification application is still under review.
Consumers also express concern over difficulties they experience when the servicing of their loan is transferred and complain about fees charged by the prior servicer, unexplained escrow deficiencies, issues with the new servicer accepting the prior servicer’s modification, and communication between the old and new servicer, especially when loss mitigation efforts are ongoing. Consumers claim that companies did not apply payments in the way the consumer instructed. Consumers also complain that the servicer has not made timely disbursements for tax payments or insurance premiums and in some instances has force placed insurance on their account in error. In some cases, the untimely disbursement of tax payments has resulted in late fees and penalties being assessed to the consumer’s account.
Consumer complaints about mortgage originations often involve the lengthy application and approval processes and unauthorized credit inquiries. Consumers also complain about delayed loan denials that occurred just before settlement but were based upon information that was disclosed early in the application process (i.e., bankruptcy, lack of employment history).
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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