Mortgage complaints on the rise – CFPB

by Ryan Smith29 Apr 2016
The Consumer Financial Protection Bureau received an average of about 4,600 mortgage complaints per month between January and March, according to its newest Monthly Complaint Report. That’s up from a monthly average of 3,800 during the same period last year.

Mortgages continue to be the second-most complained about financial product or service, second only to debt collection in complaint volume. Together, debt collection, mortgages and credit reporting accounted for about 69% of complaints submitted to the CFPB in March. And large mortgage lenders and servicers like Wells Fargo and Nationstar were high on consumers’ list of complained-about companies; lenders and servicers accounted for seven out of the top 10 most complained-about organizations.

The CFPB has handled about 223,100 mortgage complaints since 2011, the report found.

“The most-complained-about issue in mortgage complaints involved problems consumers encounter when they have difficulty making payments,” the CFPB reported. “Consumers continue to complain about a loss mitigation review process that is prolonged by repeated requests to submit the same documentation and a lack of responsiveness from their single point of contact. Consumers also reported that they receive conflicting and confusing foreclosure notifications while undergoing loss mitigation assistance review. Some consumers complained about the denial of their modification applications, while others stated that the terms of the modification offered to them were unaffordable.”

Consumers also complained that they weren’t properly informed when their loans were transferred to another servicer, and that their payments weren’t being applied as intended.

“Notably, consumers who were approved for a loss mitigation option—for example, a trial period plan, forbearance agreement, or loan modification— reported servicers declining payments, inaccurately applying payments, or holding payments in suspense accounts,” the CFPB reported. “Consumers expressed frustration that servicers lagged in the timely boarding and reviewing of documents while foreclosure proceedings progressed.”

The most complained-about lender in America is Wells Fargo, the CFPB reported. Between November and January – the most recent data available – the CFPB received an average of more than 420 complaints about the bank per month. That’s up by nearly 100 complaints per month from the same period 12 months prior. Meanwhile, servicing giant Ocwen – while still one of the most complained-about mortgage companies – saw the largest decrease in number of complaints, with its complaint volume dropping by 26% year over year.

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