Reverse mortgages have their fair share of supporters and opponents, but compared to other mortgage products, they have the least amount of complaints logged against them.
As of April 2016, reverse mortgages represent just 1% of mortgage-related complaints filed to the Consumer Financial Protection Bureau (CFPB), according to the agency’s latest consumer complaint report.
The monthly report for April provides a snapshot of trends in consumer complaints, including the mortgage products and companies generating the most grievances.
In total, the CFPB has handled approximately 859,900 complaints across all financial services products as of April 1, 2016.
As for the mortgage arena, the Bureau has collected 223,100 complaints since its formation on July 21, 2011—making mortgages the second-most-complained-about product after debt collection, representing 26% of total complaints.
Of the total number of mortgage complaints, conventional fixed mortgages account for 30% of all complaints the Bureau receives, while conventional adjustable-rate mortgages represent 11% of complaints.
Federal Housing Administration-insured mortgages collected 10% of complaints, whereas home equity lines of credit, VA loans and reverse mortgages comprised 5%, 2% and 1% of total complaints, respectively.
The most common complaint regarding mortgages involved problems consumers encounter when they have difficulty making payments—51% when they are unable to pay, and 31% related to general payment making.
The CFPB report also spotlighted communication issues between consumers and loan servicers.
Some consumers complained about a loss mitigation review process that is prolonged by repeated requests to submit the same documentation and a lack of responsiveness from their single point of contact; whereas others reported that they receive conflicting and confusing foreclosure notifications while undergoing loss mitigation assistance review.
“Consumers complained that when they were able to speak with their servicer, the information they received was often confusing and did not provide the clarifications they were hoping for,” writes the CFPB. “Consumers stated that these customer service issues led to delays in obtaining needed resolutions for their mortgage loans.”
Consumers also complained about prolonged and confusing experiences with the loan origination process, according to the CFPB report.
Some individuals described unresponsive loan representatives and stated that they were required to submit multiple loan applications, while others reported that processing delays resulted in the loss of favorable interest rates and the expiration of rate locks.
“Today’s report shows that consumers are still running into too many dead ends and obstacles in resolving issues with their mortgage servicer,” said CFPB Director Richard Cordray in a written statement. “The Bureau will continue to press to make sure that people can get the right information and the timely help they need.”
View the CFPB’s monthly mortgage complaint report.
Written by Jason Oliva