Consumers Continue to Complain about Servicer Issues

Mortgage servicing remains a sore spot for consumers, especially those having problems paying their loans.  The Consumer Financial Protection Bureau (CFPB) has released its latest monthly consumer complaint snapshot, putting a spotlight on mortgage complaints.  Since CFPB launched its Consumer Complaint Database in June 2012 it has handled over 850,000 complaints across all financial products.  As of April 1 223,100 of those complaints were mortgage related. 

 "Today's report shows that consumers are still running into too many dead ends and obstacles in resolving issues with their mortgage servicer," said CFPB Director Richard Cordray. "The Bureau will continue to press to make sure that people can get the right information and the timely help they need."

The Bureau has grouped mortgage complaints into three categories - problems when consumers are unable to pay; confusion over loan transfers, and communication issues involving servicers.  Fifty-one percent of complaints fell into the first category.  Consumers complained of prolonged loss mitigation review processes in which the same documentation was repeatedly requested by their servicer and also that they received conflicting and confusing foreclosure notifications during the loss mitigation review process.  

Consumers also complained about the lack of information they received when their loans were transferred to another servicer.  They claim they are often not told about the transfer resulting in misdirected payments that were not properly applied to their accounts.

Another frequent complaint was about the difficulty communicating with loan servicers. Consumers said that when they were able to speak with their servicer the information they received was often confusing and didn't provide the clarifications they were hoping for, often leading to delays in obtaining a resolution of their problems.

The four companies about which the CFPB received the most mortgage-related complaints between November 2015 to January 2016 were Wells Fargo, Bank of America, Ocwen, and Nationstar Mortgage. The Bureau said this information should be evaluated in the context of the size of the company.

Of complaints received by the Bureau in March, 30 percent (8,243) were about debt collection procedures.  Another leading subject was credit reporting which accounted for 3,321 complaints, a 35 percent increase over the preceding month.

In terms of total complaints per 100,000 people, the District of Columbia, Maryland, Delaware, and Florida had the highest concentration of complaints submitted.