U.S. consumer bureau hearing more mortgage gripes

WASHINGTON – April 7, 2014 – An increasing number of complaints filed with the U.S. Consumer Financial Protection Bureau (CFPB) are related to mortgages, the agency says. Thirty-seven percent of 163,700 consumer complaints the CFPB received in 2013 related to mortgages, with the bulk of those complaints about loan modifications, collections or foreclosures, according to a CFPB report.

“The most common type of mortgage complaint involves problems consumers face when they are unable to make payments, such as issues relating to loan modifications, collections, or foreclosures,” according to the report. “Consumers with successfully completed loan modifications have complained that some servicers do not amend derogatory credit reporting accrued by consumers during trial periods – even when documents provided to the consumers by servicers indicated that they would do so.”

Also, the report notes that consumers seeking short sales have submitted complaints to the CFPB that second-lien holders have refused to accept or subordinate in a short sale. Additionally, consumers who did obtain a short sale submitted complaints that their loan accounts had been incorrectly reported as a foreclosure.

The report notes the following breakdown of the mortgage-related complaints the CFPB received in 2013:

″ Consumer problems when they’re unable to pay (loan modification, collection, foreclosure): 59 percent

″ Making payments (loan servicing, payments, escrow accounts): 26 percent

″ Applying for the loan (application, originator, mortgage broker): 8 percent

″ Signing the agreement (settlement process and costs): 4 percent

″ Receiving a credit offer (credit decision/underwriting): 2 percent

″ Other: 1 percent

Source: “CFPB Awash in Mortgage Complaints,” HousingWire (March 31, 2014)

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