The Mortgage Bankers Association sent a letter to the Consumer Financial Protection Bureau on Monday asking the federal regulator to overhaul its consumer complaint database that publishes unverified complaint narratives against mortgage companies and servicers.
The association said it objects to the government publishing unsubstantiated narratives. It called on a database revamp that would include input from the mortgage industry. They urged the CFPB, among several requests, to remove complaints that do not require action from the companies.
In the narratives, scrubbed by the CFPB of borrowers’ names, consumers complain about a variety of issues: Companies losing paperwork for mortgage modifications. Mortgage payments being incorrectly recorded. Mortgage servicers agreeing to modify a mortgage even as they move forward with foreclosure.
Nationwide, reported problems with mortgage lenders and servicers have been the top source of customer complaint against banks and other lenders reported to the CFPB since the regulator began collecting them in 2011.
The CFPB publishes consumer complaints about a variety of products and services on its website, from credit cards and checking accounts to payday loans and debt collection.
Consumer advocates argue the CFPB’s mortgage complaints are troubling because many of them represent familiar problems, such as the inability to get mortgage modifications, that borrowers have faced from mortgage companies since the housing market collapsed. They believe the complaints reflect inadequate staffing by mortgage companies to handle the large volume of delinquent borrowers.
The CFPB began publishing narrative comments in June. Initially, it published nearly 8,000 comments. Banks immediately opposed the move and pointed to the negative impact the complaints might have on lenders’ reputations.
But Richard Cordray, director of the CFPB, said publishing the information is one of the “best tools” government agencies can use to improve the operation of the financial markets.
The Mortgage Bankers Association has noted that several private websites, including Google and Yelp, offer a platform where consumers can share their experiences.
"Many of these sites invite consumers' to rank their experiences in a nonbiased manner, rather than in the context of a 'Consumer Complaint Database,’ " the letter said. "As such, their rankings are likely to be more valuable as a consumer decision tool than rankings based almost exclusively on complaints. Considering the reach of these sites, it is unnecessary as well as unwise to also employ the imprimatur of the United States government in this work."