MReport September 2015 - Cool Under Pressure

TheMReport — News and strategies for the evolving mortgage marketplace.

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50 | Th e M Rep o RT 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 launches enhanced consumer complaint database Bureau also issued a request for information in tandem with the debut. t he Consumer Finan- cial Protection Bureau (CFPB) has issued a request for information regarding its consumer complaint database after going live with an enhanced version of the database, according to the agency. The CFPB's new enhanced public-facing consumer com- plaint database, which went live on June 25, included more than 7,700 consumer accounts of complaints that consumers have had with financial companies regarding the way their mortgag- es, accounts, credit cards, debt collection, and other services are handled. The Bureau published the request for information to determine whether there are ways to help the public more easily understand the informa- tion presented in the data- base and how consumers can compare the information the database contains. "In an effort to continue dia- logue on easier ways to compare complaint handling performance, the Bureau requests specific sug- gestions from market participants, consumers, and other stakehold- ers on data normalization and its proper implementation within the database," CFPB said in the request for information. The Bureau reported as of June 1, it has handled more than 627,000 complaints from the time it opened its doors in July 2011. According to the CFPB, about 28 percent of those complaints have been mortgage-related, making it the category with the largest share (debt collection was second with 25 percent). The Bureau says it forwards the complaints to companies and works to get a response, typically within 15 days. The CFPB launched its Consumer Complaint Database in June 2012. At that time, the database included basic individual-level information about the complaints such as the date the complaint was submitted, the issue, the company being complained about, the type of product, and how the company handled the complaint. The consumer who submitted the complaint remained anonymous, though their ZIP code was included. The Bureau finalized a policy in March allowing consumers to publicly share their narratives when submitting complaints to the database. More than half of the complaints received have been shared publicly since the CFPB finalized the policy. The publishing of consumer narratives from the complaint database has been highly controversial; financial companies, including many mortgage servicers and banks, expressed concern that the Bureau was publishing one- sided, unverified information that may be damaging to companies' reputation. "The purpose of this request for information is to solicit and collect input from the public on how data are presented in the database," the CFPB said in the request for information. "The Bureau is requesting feedback on best practices for 'normalizing' the raw complaint data it makes available via the database so they are easier for the public to use and understand. To normalize data is to transform 'raw' data so that they may be compared in meaningful ways. This transformation increases the interoperability of 'raw' data—that is, the extent to which different users can share and make use of the data because they have a common understanding of its meaning." In order to provide more context and insight to the complaints received, the Five Star Institute and Black Knight Financial Services released a report titled, "Analysis and Study of CFPB Consumer Complaint Data Related to Mortgage Servicing Activities" in April. In the report, Black Knight and Five Star compared the Bureau's two predominant mortgage complaint categories—servicing and default—with loan trends and also included publicly available data from both the CFPB and mortgage servicers as reported from the CFPB database. Editor's note: The Five Star Institute is the parent company of MReport and

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