MReport April 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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48 | TH E M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T Borrowers Face a Documentation Dilemma The CFPB highlighted areas of improvement for lenders and servicers, based on mortgage-related consumer complaints. T roubles with receiv- ing periodic mortgage statements, wrong data on statements, and challenges associated with getting mortgage loan assistance are some of the major mortgage-related complaints made by consumers according to the Consumer Finan- cial Protection Bureau's (CFPB's) latest snapshot of mortgage complaints. The CFPB said that it had received around 71,000 mortgage complaints between November 1, 2016 and October 31, 2018. While a majority of these complaints (85 percent) were sent to the compa- nies for review and response, the bureau said that the remaining complaints, around 11 percent, where the CFPB did not have the primary complaint handling responsibility were sent to other regulatory agencies. Of all the mortgage-related complaints that were received by the CFPB, 50 percent were related to conventional home mortgage loans. FHA mortgages made up 13 percent while other types of mortgage products made up 25 percent of the complaints received. Most consumers complained about trouble during the payment process. This included issues with receiving periodic statements on time that resulted in a lack of information about the application of payments to a borrower's loan or about the loan's current status. The CFPB report indicated that some borrowers also attributed a missing statement to a recent transfer of servicing of the loan. Inaccurate data in the periodic statements was another source of problems that borrowers com- plained about to the CFPB and included wrong account informa- tion such as late fees assessed to a borrower's loan despite payments made on or before the due date. The snapshot also indicated that consumers complained about servicers not applying payments to their loan account as intended, with some complaints highlight- ing that despite submitting extra payments with instructions to apply those to the principal, they were either misapplied or held in an unapplied funds account or applied only after their inquiry with the servicer. Among borrowers looking at mortgage loan payment assistance, the complaints against mortgage servicers were related to dis- agreement or confusion over the servicer's denial of their request for a loan modification. Other consumers who complained about problems with loan modifica- tions reported to the CFPB that their single point of contact at the servicer was unresponsive or that they had to respond to multiple document requests. Some borrowers described the communications they received from their servicer about loan assistance as confusing, the snap- shot indicated. These consumers reported being uncertain about the requirements to continue the assistance process.

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