The Consumer Financial Protection Bureau (CFPB) released a monthly complaint snapshot highlighting consumer complaints about mortgages. The snapshot shows that consumers continue to report experiencing problems with mortgage servicers. This month’s report also highlights trends seen in complaints coming from Tennessee. As of Jan. 1, 2017, the Bureau handled approximately 1,080,700 consumer complaints across all products nationwide.
“Today’s snapshot shows that consumers continue to report running into issues when making payments on their mortgages or when trying to overcome obstacles to keep themselves in their homes,” said CFPB Director Richard Cordray. “The Bureau will continue to work to ensure that mortgage servicers give consumers the timely and effective assistance they deserve.”
With a value of over $10 trillion, the U.S. mortgage market is the largest consumer financial market in the world. Over the past three years, the Bureau has created new protections for consumers such as requiring lenders to determine that consumers can afford to repay their mortgages. The Bureau has also introduced new consumer-friendly forms to help people shop for mortgages and avoid unexpected issues at the closing table. As of Jan. 1, 2017, the Bureau handled approximately 260,500 mortgage-related complaints. Some of the findings in the snapshot include:
Consumers continue to report problems with mortgage servicing: More than 80 percent of mortgage-related complaints submitted to the Bureau had to do with issues consumers report running into when they were making payments, or when they were unable to pay their mortgage.
Consumers complain about funds being misapplied: Consumers complained that when they paid for identified shortages in their escrow accounts, the money they paid was not applied accurately and resulted in an increase in their monthly payments. Additionally, consumers complained that electronic monthly mortgage payments made via bill pay services through their financial institutions were not properly credited to their loan accounts.
Consumers report issues dealing with servicers when trying to resolve loan problems: A frequent mortgage-related complaint from consumers had to do with problems dealing with their servicer when trying to negotiate foreclosure-relief assistance on their loans. Consumers stated that servicers were slow to respond, made repeated requests for already submitted documents, and provided ambiguous denial reasons.
Companies with the most mortgage-related complaints: The three companies that the Bureau has received the most average monthly complaints about were Wells Fargo, Bank of America, and Ocwen.
National Complaint Overview
Through Jan. 1, 2017, the CFPB has handled approximately 1,080,700 complaints nationally. Some of the findings from the statistics being published in this month’s snapshot report include:
Complaint volume: For December 2016, debt collection was the most-complained-about financial product or service. Of the approximately 23,000 complaints handled in December, there were 7,196 complaints about debt collection. The second most-complained-about consumer product was credit reporting, which accounted for 3,837 complaints. The third most-complained-about financial product or service was mortgages, accounting for 3,762 complaints.
State information: Alaska, Georgia, and Louisiana experienced the greatest year-to-year complaint volume increases from October to December 2016 versus the same time period 12 months before; with Alaska up 57 percent, Georgia up 46 percent, and Louisiana up 32 percent.
Most-complained-about companies: The top three companies that received the most complaints from August through October 2016 were Equifax, Wells Fargo, and TransUnion.
Geographic Spotlight: Tennessee
This month, the CFPB highlighted complaints from Tennessee. As of Jan. 1, 2017, consumers in Tennessee submitted 17,800 of the 1,080,700 complaints the CFPB handled. Of those complaints, 4,700 and 5,800 have come from consumers in the Memphis and Nashville metro areas respectively. Findings from the Tennessee complaints include:
Debt collection is the most-complained-about product or service: Consumers in Tennessee most often submitted complaints about debt collection. Debt collection complaints accounted for 34 percent of the complaints submitted to the Bureau by consumers from Tennessee, while nationally debt collection complaints account for 27 percent of complaints.
Rate of mortgage-related complaints lower than the national average: Complaints related to mortgages accounted for 19 percent of all complaints submitted by consumers from Tennessee. This is lower than the rate of 24 percent at which consumers nationally submit mortgage complaints to the Bureau.
Most-complained-about companies: Equifax, Experian, and TransUnion, were the most-complained-about companies for consumers in Tennessee.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, established consumer complaint handling as an integral part of the CFPB’s work. The CFPB began accepting complaints as soon as it opened its doors in July 2011. It currently accepts complaints on many consumer financial products, including credit cards, mortgages, bank accounts and services, student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans.
In June 2012, the CFPB launched its Consumer Complaint Database, which is the nation’s largest public collection of consumer financial complaints. When consumers submit a complaint they have the option to share publicly their explanation of what happened. For more individual-level complaint data and to read consumers’ experiences, visit the Consumer Complaint Database at: www.consumerfinance.gov/complaintdatabase/
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 the 60 days companies have to respond to complaints, confirming a commercial relationship with the consumer. Company-level information should be considered in the context of company size.