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Th e M Rep o RT | 31 Feature N umbers don't lie…except when they do. When entering the realm of statistics, numbers definitely have the potential to weave plenty of misleading and false narratives. This is unfortunate since stories based on quantitative data tend to survive on their numerical authority alone, while sometimes hiding behind subtle deceptions based on the foundation of math- ematical analysis. Such is the case with the Consumer Financial Protection Bureau (CFPB) Consumer Complaint Database. The database is filled to the brim with com- plaints about servicers, lenders, and financial service providers. Was a servicer late in dealing with a loan modification, unrecep- tive by phone, or flat out unhelpful or rude? The CFPB database of complaints is there to catch those grievances and report them to the financial services industry and the world as informed data. But probe deeper, as some analysts did recently, and the numbers from the CFPB do not look as daunting or as thorough as they do at first glance. In fact, the industry discovered simply analyzing data from the CFPB is not enough, especially since the database arrives with its own built-in bias—that bias being the very nature of the database itself. It collects complaints, not praises, and ignores the larger uni- verse of loans serviced nationwide. To fill the void of well-rounded data, Black Knight Financial Services and the Five Star Institute jumped into the miss- ing space and used data from the CFPB database and its own analytics to inform its latest white paper on CFPB complaints. The big takeaway from the report: servicers have improved tremendously. The Numbers in Context A s servicers become preoccupied with fixing problems reported in the database, one significant development has slipped under the radar: the num- ber of CFPB complaints plum- meted by more than 50 percent for loan modifications, collec- tions, and foreclosures during the two-year period stretching from 2013 through 2014, according to a recent white paper titled "Analysis and Study of CFPB Consumer Complaint Data Related to Mort- gage Servicing Activities," pro- duced by Black Knight Financial Services in conjunction with the Five Star Institute. The results paint a picture of an industry that has made incred- ible strides. The number of non-current loans fell from more than 5 million in the first quarter of 2013 to under 4 million in the fourth quarter of 2014, reflecting a 27 percent drop. Five Star President and CEO Ed Delgado, who initially proposed the idea for the report last year in re- sponse to mounting criticism of the industry by the CFPB, maintains the purpose of the report is not to "dismiss or diminish" the valid- ity of the inquiries by consumers, but rather to "position and better understand the data." "The information contained in this report plays an important role in measuring the scope of volume related to CFPB inquiries made, in juxtaposition to the total number of mortgage hold- ers in the U.S. market," Delgado said. "Through the data lens, we can clearly examine opera- tional efficiency and defect while measuring progress in providing quality service to homeowners." "A 53 percent reduction in com- plaints about loan modifications and foreclosures is great news," Freddie Mac spokesman Brad German said. "I would attribute much of the improvement to the rising diligence and effective- ness of many servicers plus the impact of the Servicing Alignment Initiative, which requires early and frequent outreach to borrow- ers who need assistance." To produce these numbers, Black Knight and Five Star made the commitment last year to promote a greater understanding of CFPB data by creating a pro- totype report using data contrib- uted by the CFPB and servicers. Conclusions from the first report published in April show servicers are performing at optimum levels in dealing with non-current loans. "I think it does demonstrate that the industry has been focus- ing on the more difficult loan population: the non-performing loans, those that are in some stage of delinquency," said Dori Daganhardt, VP of product market- ing and market strategy at Black Knight Financial Services. "They are trying to ensure that the customer experience through that process has improved." Black Knight's loan-level data "I would like to see the industry and CFpB continue to work together to provide even deeper context relative to complaints received, particularly regarding the percentage of complaints verified." — Ray Barbone, EVP of Mortgage Services, BankUnited Numbers Don't Lie Complaints to the CFPB may not be what they seem. By Kerri Panchuk and Brian Honea