CFPB Releases summary of consumer mortgage complaints 2018-2020

The Consumer Financial Protection Bureau released a highly detailed report of consumer complaints received by the oversight agency regarding the lifecycle of various financial transactions, including mortgage loans.

The report breaks down complaints by category, geography, and racial and other demographics and describes interesting variances between the nature of complaints among races, ethnicity, and various communities throughout the nation.

Interestingly consumer experiences with the closing of mortgage loans is bundled with “loan origination” and therefore the details of complaints attributed to title and settlement services in support of the mortgage process cannot be fully determined. However, the statistics do reflect that the number of “loan origination” complaints among all consumers rose nearly 70% between 2018 and 2020.

At Secure Insight we have always advocated that the closing of a mortgage loan is the time of greatest potential exposure to harm by a consumer. A negligent or criminal actor engaged in the settlement process can steal a consumer’s identity, steal proceeds, falsify payoff details, substitute doctored title reports failing to remove existing liens, hide foreclosure rescue, builder-bailout and other mortgage fraud schemes, or simply look the other way when fraud occurs.

Settlement agents are the only third parties in the mortgage process whom lenders allow to access the loan documents, mortgage proceeds, and borrower personal and financial information, all at a distance. It can be and has been a recipe for consumer harm.

While I do hope the CFPB analyzes and reports closing experience complaints in the future, as the industry can learn from that information, I urge everyone to read the complaint report and gain greater wisdom regarding how consumers view the mortgage lending experience generally.

Read the full report here: https://files.consumerfinance.gov/f/documents/cfpb_consumer-complaints-throughout-credit-life-cycle_report_2021-09.pdf

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