Consumers continue to face problems with mortgage servicing, according to the Consumer Financial Protection Bureau's (CFPB) latest monthly consumer complaints snapshot
Of particular concern are certain circumstances, such as when consumers apply for a loan modification to avoid foreclosure. As of Sept. 1, 2015 the CFPB has handled over 702,900 complaints across all products.
“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.”
With a total value topping $10 trillion, the mortgage market is the largest consumer financial marketplace in the country. In 2014, the CFPB put in place strong rules that protect consumers throughout the mortgage process -- from taking out the loan to paying it back.
Since the CFPB began accepting consumer complaints in 2011, it has received more mortgage-related complaints than any other type of financial product. As of Sept. 1, the agency had handled approximately 192,500 mortgage-related complaints.
An array of complaints
Some of the findings in the snapshot include:
- Continued problems preventing foreclosure: Over 50% of mortgage complaints have to do with problems consumers face when they are unable to make payments. Consumers complain of delays and a lack of information when applying for a loan modification. Additionally they complain that servicers often move forward with foreclosure proceedings while a 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 say 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 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 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.
National complaint overview
As of Sept. 1, 2015, the CFPB has handled 702,900 complaints nationally. Some of the highlights from the statistics 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%. The next largest increase was North Carolina, where complaint volume rose by 36% from the same time period last year.
- Most-complained-about companies: The top three companies about which the CFPB received the most complaints was unchanged from last month’s report. From April through June 2015 Equifax, Experian, and Bank of America were the three most-complained-about companies.