Complaint snapshot: Mortgage

Complaint volume

One of the primary functions of the Bureau of Consumer Financial Protection ("Bureau") is collecting, investigating, and responding to consumer complaints. Created as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), the Office of Consumer Response ("Consumer Response") hears directly from consumers about the challenges they face in the marketplace, answers their inquiries about consumer financial products and services, brings their concerns to the attention of companies, and assists in addressing their complaints.

This Complaint Snapshot provides a high-level overview of trends in consumer complaints during the last 24 months with a focus on mortgage complaint volume. To account for monthly fluctuations including seasonality, this Complaint Snapshot uses a three-month rolling average, comparing the current average to the same period in the prior year where appropriate. In some cases, this Complaint Snapshot compares the most recent month to the 24-month average to highlight more recent trends.

Visit consumerfinance.gov/complaint to learn about how we handle complaints. Visit our Consumer Complaint Database at consumerfinance.gov/complaintdatabase to search, sort, filter, and export complaints.

By product

Between November 1, 2016 and October 31, 2018, the Bureau received approximately 646,200 complaints, including approximately 28,100 complaints in October 2018. Table 1 shows the percentage change in complaint volume by product, comparing August 2017 - October 2017 with August 2018 - October 2018.

  • Prepaid card complaints showed the greatest percentage increase from August 2017 - October 2017 (180 complaints) to August 2018 - October 2018 (228 complaints), representing an increase of approximately 26 percent.
  • Checking or savings account complaints showed the second greatest percentage increase from August 2017 - October 2017 (1,871 complaints) to August 2018 - October 2018 (2,129 complaints), representing an increase of approximately 14 percent.
  • Student loan complaints showed the greatest percentage decrease from August 2017 -

October 2017 (monthly average of 1,086 complaints) to August 2018 - October 2018 (monthly average of 818 complaints), representing a decline of approximately 25 percent. This year-over-year decline is likely because student loan complaint volume was elevated in 2017 following the Bureau's enforcement action against a student loan servicer.

  • Credit or consumer reporting complaints represented approximately 40 percent of complaints received in October 2018.
  • Debt collection complaints represented approximately 23 percent of complaints received in October 2018.
  • Prepaid card showed the greatest percentage monthly increase against its rolling 24month average (51 percent).
  • Student loan complaints showed the greatest percentage monthly decrease against its rolling 24 month average (-37 percent). As noted for the August 2017 - October 2017 to August 2018 - October 2018 comparison in Section 1.1, this year-over-year decline is likely because student loan complaint volume was elevated in 2017 following the Bureau's enforcement action against a student loan servicer.
  • Credit or consumer reporting, debt collection, mortgage, credit card, and checking or savings were the top five most-complained-about consumer financial products and services, collectively representing approximately 89 percent of complaints received in October 2018.

By state

  • States with the greatest complaint volume percentage increase from August 2017 - October 2017 to August 2018 - October 2018 were Hawaii (41 percent), Wyoming (33 percent), and Arkansas (24 percent).
  • States with the greatest complaint volume percentage decrease from August 2017 - October 2017 to August 2018 - October 2018 were Vermont (-57 percent), Nebraska (-43 percent), and North Dakota (-38 percent).
  • Of the five most populated states, Florida (11 percent) had the greatest complaint volume percentage increase and California (-18 percent) had the greatest complaint volume percentage decrease from August 2017 - October 2017 to August 2018 - October 2018.

Product spotlight: Mortgage

The Bureau received approximately 71,000 mortgage complaints between November 1, 2016 and October 31, 2018, representing 11 percent of total complaints.

During this time period, the Bureau sent approximately 60,500 (or 85 percent) of all mortgage complaints to companies for review and response. The remaining complaints were referred to other regulatory agencies, incomplete, or are pending with the Bureau or the consumer. The Bureau referred approximately 11 percent of the mortgage complaints it received to other regulators. Complaints may be referred to other regulators when the Bureau does not have primary complaint handling responsibility, such as complaints about depository institutions with less than $10 billion in assets.

Complaints received by the Bureau help its work to regulate consumer financial products or services under existing federal consumer financial laws, enforce those laws judiciously, and educate and empower consumers to make better-informed financial decisions.

Complaints by type

Complaint data about mortgages can be better understood in the context of other data, such as the number of loans serviced or the volume of new originations. The Bureau publishes market information about financial products and services on its website. For example, the Home Mortgage Disclosure Act (HMDA) requires many financial institutions to maintain, report, and publicly disclose information about mortgages. Visitors to the Bureau's website can explore HMDA data using the Bureau's online tools.

The Bureau's complaint form prompts consumers to identify the the type of mortgage loan about which they are submitting a complaint. Figure 1 shows the types of mortgages idenfied by consumers in complaints submitted to the Bureau since November 1, 2016. Consumers selected conventional home mortgage in 50 percent of complaints submitted during this time period.

Figure 2 shows the issue category selected by consumers in mortgage complaints received between November 1, 2016 and October 31, 2018. The most common issues identified by consumers are trouble during payment process (42 percent) and struggling to pay mortgage (36 percent).

The Bureau also collects unstructured data from consumers and companies during the complaint process. The consumer's narrative description of what happened, consumer-provided documents, the company's response, and company-provided documents are examples of unstructured data. The Bureau uses a variety of approaches to analyze consumer complaints including, for example, cohort and text analytics to identify trends and possible consumer harm. The review and analysis of unstructured data from those complaints sent to companies for response offers deeper insights into consumers' complaints and helps the Bureau and mortgage companies understand problems consumers are experiencing with mortgage loans.

Consumers submit complaints about trouble during the payment process more than any other type of problem. See Figure 2. An analysis of these complaints identified consumer concerns were related to periodic statements, application of payment, escrow accounts, and payoff requests.

  • Complaints describing issues with periodic statements suggest some consumers are not receiving statements on time, resulting in a lack of information about the application of payments to their loan or about the loan's current status. In some of these complaints, consumers attributed a missing statement to a recent transfer of servicing of the loan. Other consumers complained of periodic statements containing inaccurate account information such as late fees assessed to their loan despite payments made on or before the due date.
  • Consumers complained about servicers not applying payments to their loan account as intended. Some consumers reported that, despite submitting extra payments with instructions to apply those payments to principal, payments were either misapplied or held in an unapplied funds account and applied only after their inquiry to the servicer.
  • Consumers complained of escrow account analyses indicating a shortage of funds. In these complaints, some consumers stated they received an escrow analysis statement that indicated a shortage because of an increase to hazard insurance, taxes, or both. Many of these consumers reported that, after researching their tax bill or hazard insurance premium, they did not find an increase in costs and, therefore, considered the escrow shortage unwarranted.
  • Some consumers complained of payoff information requests that were either not addressed or that were inaccurate because the consumer did not receive the information on time. In some of these complaints, consumers reported multiple unsuccessful attempts to obtain payoff information. Other consumers reported an inaccurate payoff amount delayed their attempt to pay their loan in full.

The Bureau also regularly receives complaints from consumers who report struggling to pay their mortgage. Consumers complained of difficulty receiving assistance on their loan following a financial hardship, illness, natural disaster, and other difficulties. Some consumers who report stated that they disagreed with or were confused by the servicer's denial of their request for a loan modification. Other consumers described challenges while attempting to obtain assistance. These consumers complained that their single point of contact had been unresponsive and about having to respond to multiple document requests. Some consumers described the communications they received from their servicer about loan assistance as confusing. These consumers reported being uncertain on the requirements to continue the assistance process.

Complaints by state

Table 6 shows the percentage change in mortgage complaint volume by state. Some of the highlights include:

  • States with the greatest percentage increase in mortgage complaints from August 2017 - October 2017 to August 2018 - October 2018 were Iowa (48 percent), New Hampshire (38 percent), and New Mexico (21 percent).
  • States with the greatest percentage decrease in mortgage complaints from August 2017 - October 2017 to August 2018 - October 2018 were Utah (-59 percent), Michigan (-48 percent), and New York (-39 percent).
  • Of the five most populated states, Florida (7 percent) had the greatest percentage increase and New York (-39 percent) had the greatest percentage decrease in mortgage complaints from August 2017 - October 2017 to August 2018 - October 2018.

https://www.consumerfinance.gov/data-research/research-reports/complaint-snapshot-mortgage/