Who do you think should be responsible for receiving and resolving mortgage complaints from home loan borrowers?

  • Government agencies – the Consumer Financial Protection Bureau (CFPB) is an important mediator (57%, 41 Votes)
  • Lenders and mortgage servicers – go straight to the source (38%, 27 Votes)
  • Brokers and agents – they’re the ones who represent the borrowers in the first place (6%, 4 Votes)

Total Voters: 72

Home loan borrowers may now submit a mortgage complaint online with the Consumer Financial Protection Bureau (CFPB), the recently-launched government agency fathered by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

The online mortgage complaint form allows borrowers to write the details of their case as well as upload supporting documents. (Online chat forums are available on the website for borrowers who have questions.) The CFPB will then forward the complaint to the lender and the borrower will be issued a tracking number to monitor the progress of their complaint. [Click here to file a mortgage complaint with the CFPB.]

Once the CFPB has forwarded the complaint, the lender is expected to review the case, contact the borrower if needed, resolve the issue and report its actions to the CFPB. The CFPB will forward the case to another government agency if the issue concerns state regulation or a matter outside the CFPB’s power. If the case concerns fraud or identity theft, it will be forwarded to state and federal law enforcement agencies.

first tuesday take: Know a homeowner crying lender foul play? The first tuesday journal online has been the recipient of quite a collection of mortgage complaints – and that’s without a formal complaint process – so we know the grievances are out there.

The CFPB, though still in its infancy, has the opportunity to do something with those complaints by refining the issues which housing reform legislation must target. If the agency amasses enough mortgage complaints (it processed more than 5,000 credit card complaints in the first three months after its launching in July 2011), it can aggregate the data and spot what the major problems are between borrowers and lenders. Brokers and agents, make yourselves available to your clients in need to ensure their case is clearly and thoroughly documented with the CFPB.

As to whether the mortgage complaint system will bully otherwise bull-headed lenders into responding, we’ll have to wait and see. There isn’t clout in simply passing along complaints to lenders and handing borrowers a tracking number – and it doesn’t help that the CFPB has been getting a lot of criticism from anti-consumer politicians on Capitol Hill as of late.

Without the weight of political support, the CFPB’s effort to channel the mortgage grievances of American homeowners will be less than a slap on the wrist of the lender. [For more information on other CFPB projects, see the June 2011 first tuesday article, Extreme makeover: a simpler good-faith estimate; for more information on the creation of the CFPB, see the August 2010 first tuesday article, New government agency targets consumer protection.]

RE: “Consumer Bureau Is Taking Your Mortgage Complaints” from the NY Times