Why this article is important: Compliance doesn’t prevent all consumer complaints, but it goes a long way toward happier customers and borrowers — and better business for compliant MLOs.
Mortgage complaints
During 2025, the Consumer Financial Protection Bureau (CFPB) received just over 30,000 consumer complaints regarding mortgages, 96% of which the CFPB found to be actionable.
Over half of complaints the CFPB received were about borrowers’ difficulty during the payment process. One-quarter of complaints related to an inability to repay the mortgage. 10% of complaints referenced applying for a mortgage and 8% referenced closing on a mortgage. 6% of complaints referenced credit report issues.
The largest share of complaints — about the payment process — included:
- trouble reaching service representatives;
- conflicting information from different service representatives;
- rude service representatives; and
- unanswered communications.
Borrowers struggling to make payments also reported instances of dual tracking — when a servicer is simultaneously processing a loan modification or forbearance application while pursuing the foreclosure sale.
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In resolution of the complaints, mortgage companies — including lenders, servicers and mortgage loan originators (MLOs) — provided:
- explanations for 91% of cases (usually accompanied with a written apology);
- administrative responses which included reasoning for the action taken for 3% of cases;
- non-monetary relief for 3% of cases;
- monetary compensation in 2% of cases; and
- no response for 1% of cases.
The instances of monetary compensation provided by mortgage companies included reversing fees when found to be incorrectly charged, such as refunding:
- application fees when service representatives failed to respond to completed mortgage applications;
- overcharges in escrow payments; and
- late fees charged to borrowers when the borrower was unable to make payments on the servicers’ website during a cyber incident.
During 2025, the number of complaints increased by 17% across all mortgage types, with the biggest increase experienced for U.S. Department of Veterans Affairs (VA) mortgages, likely due to the long government shutdown and staffing issues.
Overall, FHA-insured and VA-guaranteed mortgages received a disproportionally high number of complaints compared to conventional mortgages.
Complaint prevention
To avoid complaints, MLOs need to create and maintain procedures for every step of the mortgage process, from inquiry to application, escrow to closing, selling the mortgage to servicing, and all the while maintaining responsive communications with consumers.
For example, the most successful MLOs:
- conduct an annual review of policies and procedures;
- conduct regular employee regulatory training (quarterly or, at minimum, annually);
- conduct quality control reviews of loan samples;
- require borrower education through clarity of mortgage costs and descriptions for charges; and
- produce trend reports to address complaints and identify opportunities for improvement.
Most significant, MLOs need to stay ahead of changes to both the state and federal mortgage laws and develop procedures to support compliance.
For example, California’s Homeowner Bill of Rights prevents:
- dual-tracking foreclosure, when the mortgage servicer is simultaneously in the foreclosure process and reviewing an application for mortgage modification;
- robo-signing foreclosure documents, as automation heightens the occurrence of wrongful foreclosure; and
- more than one point of contact, which acts to mislead homeowners in the foreclosure process. [CC §§2923.7; 2923.5; 2924.13]
Worse than a complaint to handle, violations of foreclosure law by mortgage servicers may result in money paid to the homeowner, sufficient to cover “economic damages.” This amount includes attorney fees and court costs. [CC §2924.12]
Read about the latest changes — and potential updates — to laws impacting mortgages and other real estate issues in California at our Legislative Gossip page.
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