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Abe Scarr,
Illinois PIRG Education Fund

New Report: Mortgage Problems Rank #1 at CFPB for Consumer Complaints

Bank of America Receives Most Mortgage Complaints in Illinois
For Immediate Release

Mortgage problems were the top source of complaints to the Consumer Financial Protection Bureau (CFPB), according to a report released today by the Illinois PIRG Education Fund. The report also found that Bank of America was the most complained about company in Illinois for mortgage problems.

“Before the CFPB was created, victims of mortgage errors like misapplied payments and incorrect late fees were at the mercy of the banks. Now, we have a cop on the beat.” said Abe Scarr, Director  of Illinois PIRG Education Fund. “The CFPB, which turns four next week, is also making its tools for consumers even better—just last month it began publishing detailed consumer stories in its public complaint database.”

The report, “Mortgages and Mortgage Complaints: The CFPB’s Consumer Complaint Database Gets Real Results for Victims of Mortgage Problems,” is the latest in a series of reports by Illinois PIRG Education Fund that analyze the complaints in the CFPB’s public Consumer Complaints Database. The CFPB began accepting complaints in July 2011 and now accepts complaints for 11 financial product categories; it began accepting complaints on mortgages in December 2011.

Some key findings:

  • The CFPB has published 138,086 complaints about mortgages, the most complaints received about any financial product from December 2011 until March 16, 2015.
  • Mortgages remain the top source of complaints to the CFPB even though annual mortgage complaint volumes declined slightly in 2014 and the volume of the CFPB’s 10 other product categories continued to grow.
  • In early 2015, debt collection complaints became the #1 complaint to be published in the CFPB’s database on a monthly basis. Mortgage complaints, however, remain at #2 on a monthly basis and are still the #1 complaint overall, accounting for 38% of all complaints.
  • The vast majority of mortgage complaints (85%) fall into two issue categories: Problems when consumers are unable to pay (categorized in the database as “loan modification, collection, foreclosure”) make up 55% of the total; problems making payments (categorized in the database as “loan servicing, payments and escrow account”) make up 30%. The other four issue categories total 15%.
  • Bank of America was the most complained about company in Illinois for mortgage problems. Bank of America received the most complaints in 45 states and Washington, DC. Wells Fargo was complained about the most in five states.
  • Illinois ranks 23rd in complaints per 100,000 residents and 9th for overall number of complaints.

"The data in the report shows that many homeowners struggling to avoid foreclosure continue to have difficulties getting clear and timely responses from their lender or loan servicer regarding requests for loan modifications and other issues,” said, Bob Palmer, Policy Director for Housing Action Illinois. “The ability to submit a complaint against a company through the CPFB is an important resource to assist homeowners in their efforts to maintain their homes.”

The report comes as the CFPB turns four years old on July 21st. Congress established the CFPB as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The CFPB was equipped by Congress with authority to update, write and enforce regulations on Wall Street and other financial institutions. That authority, combined with consumer education tools and the complaint database, has served as an important check on tricks and traps in the mortgage industry.

With its authority over both updated and new mortgage regulations, the CFPB has also taken enforcement actions against more than 40 companies, halting illegal activities and securing over $2.9 billion in relief and refunds for mortgage consumers. “When the CFPB ordered Ocwen, the largest nonbank mortgage servicer in the country, to provide $2 billion in relief to customers for misconduct like charging unauthorized fees and failing to apply payments towards mortgages, it sent a message to the whole industry to clean up its act,” said Scarr 

The CFPB has also acted on recommendations Illinois PIRG Education Fund made in previous reports to add complaint narratives to the database. In March 2015, the CFPB started allowing consumers to opt into publicly sharing the details of their complaints in the database. The first 7,700 narratives were published on June 25th.  No personally identifiable information, including demographic details, is shared publicly.

“Imagine that your loan is purchased from your original lender by another firm, who then fails to record your on time payments and does not fix their error despite you providing them their own reference number and your bank statements to confirm the payments – and then, they raise your payments despite their multiple errors. This happened to an Illinois family, who received monetary relief after submitting their complaint to the CFPB. Consumers need a strong CFPB that reins in reckless mortgage companies who ignore the rules,” concluded Scarr.

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