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Washington, D.C. –Mortgage problems were the top source of complaints to the Consumer Financial Protection Bureau (CFPB), according to a report released today by the U.S. PIRG Education Fund. The report also found that Bank of America was the most complained about company in 45 states and Washington, D.C. for mortgage problems.
“Before the CFPB was created, victims of mortgage errors like misapplied payments and incorrect late fees were at the mercy of the banks. Now, we have a cop on the beat.” said Mike Litt, Consumer Program Advocate with the U.S. PIRG Education Fund. “The CFPB, which turns four next week, is also making its tools for consumers even better—just last month it began publishing detailed consumer stories in its public complaint database.”
The report, “Mortgages and Mortgage Complaints: The CFPB’s Consumer Complaint Database Gets Real Results for Victims of Mortgage Problems,” is the latest in a series of reports by the U.S. PIRG Education Fund that analyze the complaints in the CFPB’s public Consumer Complaints Database. The CFPB began accepting complaints in July 2011 and now accepts complaints for 11 financial product categories; it began accepting complaints on mortgages in December 2011.
Some key findings:
- The CFPB has published 138,086 complaints about mortgages, the most complaints received about any financial product from December 2011 until March 16, 2015.
- Mortgages remain the top source of complaints to the CFPB even though annual mortgage complaint volumes declined slightly in 2014 and the volume of the CFPB’s 10 other product categories continued to grow.
- In early 2015, debt collection complaints became the #1 complaint to be published in the CFPB’s database on a monthly basis. Mortgage complaints, however, remain at #2 on a monthly basis and are still the #1 complaint overall, accounting for 38% of all complaints.
- The vast majority of mortgage complaints (85%) fall into two issue categories: Problems when consumers are unable to pay (categorized in the database as “loan modification, collection, foreclosure”) make up 55% of the total; problems making payments (categorized in the database as “loan servicing, payments and escrow account”) make up 30%. The other four issue categories total 15%.
- Bank of America received the most complaints in 45 states and Washington, DC. Wells Fargo was complained about the most in five states.
The report comes as the CFPB turns four years old on July 21st. Congress established the CFPB as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The CFPB was equipped by Congress with authority to update, write and enforce regulations on Wall Street and other financial institutions. That authority, combined with consumer education tools and the complaint database, has served as an important check on tricks and traps in the mortgage industry.
With its authority over both updated and new mortgage regulations, the CFPB has also taken enforcement actions against more than 40 companies, halting illegal activities and securing over $2.9 billion in relief and refunds for mortgage consumers. “When the CFPB ordered Ocwen, the largest nonbank mortgage servicer in the country, to provide $2 billion in relief to customers for misconduct like charging unauthorized fees and failing to apply payments towards mortgages, it sent a message to the whole industry to clean up its act,” said Litt.
The CFPB has also acted on recommendations U.S. PIRG Education Fund made in previous reports to add complaint narratives to the database. In March 2015, the CFPB started allowing consumers to opt into publicly sharing the details of their complaints in the database. The first 7,700 narratives were published on June 25th. No personally identifiable information, including demographic details, is shared publicly.
“Imagine getting approved for a loan modification that you need to avoid a foreclosure, only to risk losing your home because you’ve been given less than two weeks to turn in paperwork instead of the four weeks you were originally told you would have. That happened to a veteran from Virginia, who received relief after submitting his complaint to the CFPB. Consumers need a strong CFPB that reins in reckless mortgage companies who ignore the rules,” concluded Litt.
Download the report, “Mortgages and Mortgage Complaints: The CFPB’s Consumer Complaint Database Gets Real Results for Victims of Mortgage Problems,” http://uspirg.org/reports/usp/mortgages-and-mortgage-complaints
This is the sixth in a series of reports by the U.S. PIRG Education Fund that analyze the complaints in the CFPB’s public Consumer Complaints Database. Previous reports have analyzed debt collection, bank account, private student loan, credit reporting, and credit card complaints. http://www.uspirg.org/page/usf/reports-cfpb-gets-results-consumers
Visit the CFPB’s public Consumer Complaints Database: www.consumerfinance.gov/complaintdatabase/
U.S. PIRG Education Fund works to protect consumers and promote good government. We investigate problems, craft solutions, educate the public, and offer meaningful opportunities for civic participation. www.uspirgedfund.org
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