Report: Consumer Protection

Mortgages and Mortgage Complaints

The CFPB’s Consumer Complaint Database Gets Real Results for Victims of Mortgage Problems
Released by: Illinois PIRG Education Fund

The Consumer Financial Protection Bureau (CFPB) was established in 2010 in the wake of the worst financial crisis in decades. Its mission is to identify dangerous and unfair financial practices, to educate consumers about these practices and to regulate the financial institutions that perpetuate them.

To help accomplish these goals, the CFPB has created and made available to the public the Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and how they are resolved. The Consumer Complaint Database enables the CFPB to identify financial practices that threaten to harm consumers, and it enables the public to evaluate both the performance of the financial industry and of the CFPB.

This is the sixth in a series of reports that review complaints to the CFPB nationally and on a state-by-state level. In this report we explore consumer complaints about mortgages, with the aim of uncovering experiencing with mortgage originators and servicers.

This report looks at total mortgage complaints. It looks at complaint volumes over time and among the six mortgage issues that the CFPB defines. These issues include the following:

  • Problems when consumers are unable to payProblems consumers have making payments
  • Applying for the loan
  • Signing the agreement
  • Receiving a credit offer
  • Other problems

We also compare companies and complaints on a state by state and total basis.

Findings

Consumer complaints about mortgages are the most common complaint in the CFPB’s database. Since it began accepting mortgage complaints in December 2011, the CFPB has published 138,086 complaints about mortgages, the most complaints received about any financial product. Through March 16, 2015, 38% of all published complaints in the database were mortgage complaints. Although annual mortgage complaint volumes declined slightly in 2014 as the volume of the CFPB’s 10 other product complaint categories (i.e. debt collection, credit reporting, credit card, bank account or service, consumer loan, student loan, payday loan, money transfers, prepaid card, and grow, data are insufficient to predict a declining trend.

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.

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%.

Five out of the six mortgage issues declined in volume. One issue, complaints related to making payments (loan servicing, payments, escrow account), continues to increase. Such complaints increased by 19% in 2014, compared to 2013. The CFPB says that payment related complaints include loan servicing, payments and escrow accounts.

Ten companies account for 77% of all mortgage complaints to the CFPB: Bank of America, Wells Fargo, Ocwen, JPMorgan Chase, Nationstar Mortgage, Citibank, Green Tree Servicing, HSBC, U.S. Bancorp, and PNC Bank.

  • Bank of America has the most total mortgage complaints with 31,123, making up about 23% of all mortgage complaints.
  • Bank of America was the most complained about company in 45 states and the District of Columbia. Wells Fargo was complained about the most in five states.

When adjusted for market share, the three most complained about companies are Ocwen, Nationstar Mortgage, and Bank of America, in that order. The states with most complaints per capita are the District of Columbia, followed by Maryland, New Hampshire, Florida, Delaware, Georgia, New Jersey, California, Nevada, and Virginia.

Consumers who have complained about mortgages have received monetary and non-monetary relief through the CFPB’s complaint process.

  • 14,734 consumers - more than 1 in 10 mortgage complainants – received relief, either monetary or non-monetary.
  • Company responses to mortgage complaints are more often disputed by consumers than any other financial product’s company response in the database, with about 23% of all company responses disputed.
  • Of the 10 companies with the most overall mortgage complaints, U.S. Bancorp and Bank of America were the most likely to report extending monetary or non-monetary relief, providing relief for 20 percent and about 18 percent of complaints, respectively.

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