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WBK Industry News - Federal Regulatory Developments

CFPB Releases Complaint Report for January 2017

According to the Monthly Complaint Report (Vol. 19) as of January 1, 2017, the CFPB has handled about 1,080,700 complaints, including approximately 22,900 complaints in December 2016.

Complaints about student loans showed the greatest percentage increase from October – December 2015 (497 complaints) to October – December 2016 (1,040 complaints), representing about a 109 percent increase. Prepaid complaints showed the greatest percentage decrease from October – December 2015 (458 complaints) to October – December 2016 (189 complaints), representing about a 59 percent decrease. Debt collection complaints represented more than any other type of complaint, representing about 7,196 of the total cumulative complaints (22,852) in December 2016. Debt collection, credit reporting, and mortgage complaints continue to be the top three most-complained-about consumer financial products and services, collectively representing about 65 percent of complaints submitted in December 2016.

This Month the CFPB spotlighted Mortgages. The CFPB handled approximately 260,300 mortgage complaints since July 21, 2011, making mortgage related issues the most-complained-about product, representing 24 percent of total complaints. The most common issues are problems when consumers are unable to pay (49%), making payments (33%), applying for the loan (9%), signing the agreement (5%), receiving a credit offer (3%), and all others (2%). Percentages are rounded.

Consumers having problems with making payments reported difficulties with servicers while attempting to negotiate loss mitigation. Payment issues involved those related to missing payments that resulted in delinquent account statuses, servicers losing their timely payments resulting in negative credit reporting, payments made by the consumer’s bill pay services, and electronic payments not being credited by the servicer. Issues involving escrow account shortages caused some consumers to complain about paying escrow shortages and funds not being applied accurately and that some escrow shortages were not adequately explained. Additionally, reports were received where consumers provided proof of hazard insurance coverage, but the proof was not acknowledged and servicers failed to make timely payments from escrow accounts to the consumer’s hazard insurance company, resulting in properties having inadequate coverage. Finally, consumers reported loan processing delays that caused rate lock expirations and resulted in additional fees for lock extensions. These delays included inaccurate document requirements, communication inadequacies from lenders, and inexperienced loan officers.

For this month’s complaint report, Tennessee and the Memphis and Nashville metro areas are in the CFPBs geographical spotlight. As of January 1, 2017, about 17,800 complaints were from Tennessee consumers, of which about 4,700 and 5,800 were from Memphis and Nashville, respectively.