Report Digs Deeper Into CFPB Reverse Mortgage Complaints

Last month, the Consumer Financial Protection Bureau (CFPB) published thousands of consumer narratives describing their various complaints with financial products, including reverse mortgages. But in the grand scheme of things, gripes related to reverse mortgages represent only a minute share of total mortgage complaints, according to new independent research. 

Since it began accepting mortgage complaints in December 2011, the CFPB  has published 138,086 complaints about mortgages through March 16, 2015—more than any other financial product, says the report “Mortgages and Mortgage Complaints: The CFPB’s Consumer Complaint Database Gets Real Results for Victims of Mortgage Problems” from the U.S. PIRG Education Fund, a federation of state public interest research groups. 

Overall, gripes about mortgages represent 38% of all published complaints the CFPB received during this timeframe, according to the PIRG report, which is the sixth in a series of reports analyzing complaints to the CFPB’s Public Consumer Complaint Database. 

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However, of the total mortgage complaints submitted over the past four years, those specifically regarding reverse mortgages represent less than 1% of all complaints (946), according to the U.S. PIRG’s analysis.

Consumers’ biggest area of complaints tied to reverse mortgages had to do with loan modification, collection and foreclosure (39%), which was followed closely by complaints related to loan servicing, payments and escrow account (34%).

Meanwhile, 16% represented complaints about reverse mortgage applications, originators and mortgage brokers, while only 3% of complaints were directed at credit decision and underwriting issues. 

The PIRG report also delved into the top-30 most complained-about companies, categorizing each by service, including reverse mortgages, conventional adjustable and fixed mortgages, FHA mortgages, home equity loans or lines of credit, VA mortgages, second mortgages and “other mortgages.”

Bank of America (NYSE: BAC) received the most complaints in 45 states and Washington, D.C., while Wells Fargo (NYSE: WFC) was complained about the most in five states, according to PIRG’s research. 

In the reverse space, the top-three most complained-about companies from December 2011 through March 16, 2015 were Nationstar Mortgage (NYSE: NSM), Wells Fargo and OneWest Bank.

Other companies listed included Reverse Mortgage Solutions, Bank of America, American Advisors Group, Generation Mortgage, James B. Nutter & Company,  Sun West Mortgage Company, Urban Financial of America, among others. 

Written by Jason Oliva

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  • As I had said in the past, the CFPB is on a witch hunt for the reverse mortgage product and the players in the industry. When you read the article carefully you will find the complaints against our industry is no where near as what they want one to believe.
    I am not saying we don’t have flaws with some originators and some companies themselves. The pure complexity of the product and lack of fully understating the program on the part of some senior’s will cause a certain degree of complaints.

    I am not happy with many news reports I have seen in the papers about the reverse mortgage product, most of it is blown out of proportion and misleading. I feel the CFPB does not help the situation with the news media!

    Overall, we are a good team and the product can do so much good for our senior population. No, a reverse mortgage is not for everyone but in today’s age, we are finding many more purposes to take out a HECM loan.

    John A. Smaldone

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