The Consumer Financial Protection Bureau has released its latest monthly consumer complaints snapshot, which highlights mortgage complaints.
Consumers continue to face problems with mortgage servicing, particularly during certain circumstances, such as when they apply for a loan modification to avoid foreclosure, according to the report. The snapshot also highlights trends seen in complaints coming from the Denver metro area.
As of Sept. 1, the CFPB has handled more than 702,900 complaints across all products and approximately 192,500 mortgage-related complaints.
With a value topping $10 trillion, the mortgage market is the largest consumer financial marketplace in the U.S. In 2014, the CFPB put in place consumer protections with mortgage rules designed to ensure lenders only offered mortgages that consumers could afford. Since the CFPB began accepting consumer complaints in 2011, the CFPB has received more mortgage-related complaints than any other type of financial product.
“Despite strong protections that have been put in place to protect homeowners, this month’s complaint report shows consumers are still having problems when dealing with their mortgages,” said CFPB Director Richard Cordray. “The Bureau will continue to work to make sure that consumers are being treated fairly on their mortgage issues.”
Some of the findings in the snapshot include:
- Continued problems preventing foreclosure: More than 50% of mortgage complaints relate to problems consumers face when they’re unable to make payments. Consumers complain of delays and a lack of information when applying for a loan modification. Additionally consumers complain that servicers often move forward with foreclosure proceedings while the consumer’s modification application is still under review.
- Lack of information when loans are transferred: Consumers report experiencing confusion and frustration about where to make payments when loans are transferred. When the loan transfers occur, consumers complain that payments often increase unexpectedly. Consumers also say that they do not feel properly informed about their loans being transferred in the first place.
- Trouble making payments: Nearly a third of mortgage complaints came from consumers saying that they have trouble making the proper payments on their mortgage loans. Consumers describe companies not accepting payments of anything less than the full balance owed, or finding that their payments were not properly applied despite instructions from the consumer.
- Most-complained-about companies: Wells Fargo, Bank of America and Ocwen were the three companies about which the CFPB has received the most mortgage-related complaints. Between April and June 2015, the three companies averaged around 430 complaints per month.
Company-level complaint data in the report uses a three-month rolling average of complaints sent by the Bureau to companies for response. This data lags other complaint data in this report by two months to reflect that companies are expected to close all but the most complicated complaints within 60 days.
After the CFPB forwards a company the complaint, the company also has 15 days to respond, confirming a commercial relationship with the consumer. Company level information should be considered in the context of company size.
Highlights from the full complaint statistics being published in this month’s snapshot report include:
- Complaint volume: For August 2015, the most-complained-about financial product or service was debt collection, representing about 29% of complaints submitted. Of the 25,732 complaints handled in August, approximately 7,582 of them were about debt collection. The second most-complained-about consumer product was credit reporting, accounting for approximately 5,733 complaints. Overall, the CFPB received 972 fewer complaints in August than in July.
- Product trends: In a year-to-year comparison, consumer loan complaints, which include pawn loans, title loans, and installment loans, showed the greatest percentage increase – 47% – nearly doubling from the same time last year. Payday loan complaints showed the greatest percentage decrease – 12% – over the same three month (June-August) time period between 2014 and 2015, going from 526 complaints in 2014 to 463 complaints in 2015.
- State information: Nebraska and Nevada experienced the greatest complaint volume increases from the same time last year by a considerable margin; the volume of complaints from Nebraska rose by 54%, while Nevada’s complaint volume increased by 45 percent. The next largest increase was North Carolina, where complaint volume rose by 36% compared to the same time period last year.
- Most-complained-about companies: The top three companies about which the CFPB received the most complaints remain unchanged from last month’s report. From April through June, Equifax, Experian, and Bank of America were the three most-complained-about companies.