Rise of the Rentals

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Th e M Rep o RT | 43 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SERVICING The laTesT cFPB sees major Uptick in complaints The agency saw its grievance volume double in 2013. c onsumer complaints to the Consumer Finan- cial Protection Bureau (CFPB) nearly doubled over the course of 2013, the agency revealed in an annual report. According to CFPB's figures, complaint volume last year totaled 163,700, an 80 percent increase from the 91,000 recorded com- plaints in 2012. Including this year, the bureau has received more than 310,000 complaints to date. The leap in volume underscores the challenges that still remain de- spite the progress made by financial industries in the last few years. "Consumer complaints have become central to the work of this agency. They enable us to listen to, and amplify, the concerns of any American who wants to be heard," said CFPB director Richard Cordray. "They are also our compass. They make a differ- ence by informing our work and helping us identify and prioritize problems for potential action." Areas of dissatisfaction ranged from bank accounts to debt col- lection to all manner of loans— including mortgages, which represented the greatest share of complaint volume at 37 percent. At 59 percent, the greatest share of mortgage-related issues came up when borrowers were unable to pay, "such as issues relating to loan modifications, collections, or foreclosures," CFPB said in its report. At a distant second in volume was "making payments" (26 percent), followed by complaints about applying for a loan (8 percent). "For consumers applying for a mortgage loan, consumers raise issues related to interest rate-lock agreements, such as lenders refus- ing to honor rate-locks, or assess- ing penalties when the loan does not close," the agency explained. Upon receiving a complaint, CFPB expects companies to respond within 15 days and to provide a description of the steps taken or planned. According to the bureau, companies have responded to more than 93 per- cent of complaints sent to them, and consumers have disputed 21 percent of those responses. About 7 percent of complaints end up with some form of mon- etary relief, according to CFPB, with the median amount coming to $460 for mortgage-related complaints. gse ramps Up Fines for late reporting ServicerS will feel a larger effect if they fail to report on time or do So inaccurately. F annie mae announced revisions to its maximum fee assessment for servicers that submit late or inaccurate loan reporting. "currently, fannie mae sends a failed Business rules report to a servicer that fails to submit its fannie mae investor reporting system reports on a timely basis or fails to use the correct data and formats," the company said in a release. fannie mae then fines ser- vicers in order to recoup the losses and damages that result from servicing breaches, "includ- ing reimbursement for fannie mae's internal administrative costs in tracking, reporting, and correcting these errors." for the first instance of late or inaccurate reporting, fannie will fine servicers greater of $250 or $50 per mortgage loan, up to a maximum of $5,000. the second instance increases both figures—greater of $500 or $50 per mortgage loan, up to a maximum of $10,000. the fannie mae release notes in order to qualify as a second violation, late or inaccurate reporting must occur within one year of the first instance. the third offense is a similar step up in penalties. a third instance results in $1,000 or $50 per mortgage loan, up to a maximum of $15,000, if any subsequent issue occurs within one year from the most recent previous instance. the new fee structure goes into effect may 1. "fannie mae will begin issuing warning letters and assessing compensatory fees to affected servicers for failing to meet these servicing requirements. alternatively, fannie mae reserves the right to issue an indemnification demand to any servicer that breaches these servicing requirements," the release said. CFPB

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