Homeowners’ mortgage complaints to federal authorities have this thing in common

Complaints about mortgage loans and mortgage managers are on the rise, according to the Consumer Financial Protection Bureau.

In one bulletin released this month, the agency reported that March saw the highest volume of consumer mortgage complaints in nearly three years: more than 3,400 in this month alone, compared to less than 3,000 a month for at least January 2020.

Although the CFPB did not explain why the volume of complaints increased this spring, at least one industry insider had his own theory.

“Some of it may be due to upcoming forbearance and payments when due,” said Jennifer Kouchis, senior vice president of home loans at VyStar Credit Union in Jacksonville, Florida. “Consumers have really suffered because they didn’t understand the process and it wasn’t communicated to them in an understanding way.”

In support of Kouchis’ position, most of the mortgage complaints followed by the CFPB in March were about forbearance.

Here are some of the most common complaints and what borrowers can do about them. The short version is: Contact your loan officer early and often.

Poor communication from the service agent

The main complaint from mortgage borrowers in March was the difficulty in contacting their managing agent.

Borrowers don’t have much control over how easy it is to contact their mortgage administrator – they’re not the ones hiring call center operators. But they can be proactive in communication to facilitate the process of breaking out of tolerance.

“They have to contact the lender. If they can’t reach them by phone, go to a branch. If they can’t get to a branch, they have to send a written letter, ”Kouchis said. “They must continue to act if they do not receive a response within a reasonable time.”

Desmond Brown, CFPB’s deputy director of consumer education, said it’s also a good idea for borrowers to document any conversations they have with their provider, to ensure that advice they receive remain consistent.

“Take note of these calls,” he said. “On that date, at that time, I spoke to that person and that’s what we agreed to.”

CFPB has a mortgage forbearance application guide, which includes questions to ask your lender every step of the way.

Confusing mortgage statements

This is its own branch of miscommunication: Many borrowers have worried while looking at their mortgage statement that their loan appeared to be “in arrears” while it was in forbearance.

And again, communication is the key. If you are unable to understand your statement, or if anything seems abnormal, you should contact the service agent as soon as possible.

Kouchis said she overheard some of her clients say they didn’t understand why they were receiving a statement when they were forbearing, and she explained that lenders are required to send regular billing statements even though you don’t make payments.

“You are not making payments as promised, so technically yes you are in this delinquency phase, but no late fees or negative credit will occur during the forbearance period,” she said. “This is why I really encourage consumers to contact the supplier by any means possible.”

Delay or refusal of loan modification requests

Breaking out of tolerance can be its own complicated process. Some lenders may require borrowers to make up their missed payments in one lump sum, while others will allow additional payments to be added at the end of the loan. Still others have other conditions, and it can be confusing for borrowers to know what their options are.

“It may take too much communication with the servers to know what backup options might be available,” said Greg Evans, CFPB’s regulatory compliance program manager. “Their loan may be eligible to defer all of these payments.”

Kouchis agreed that it’s crucial to explicitly ask about other options if a lender says your only choice is to make a one-time lump sum payment to get out of forbearance. Even if they tell you, other options like additional payments at the end of the loan might be on the table.

“Some lenders and credit unions don’t offer this unless you ask for it,” she said.

New abstention issues

This catch-all category included a number of complaints related to forbearance, such as inaccurate information when a loan arose out of forbearance, issues with extending forbearance or the correct application of payments made. while the loan is still withheld.

You may have noticed a trend already, but the solution here too is more communication.

“There should be some form of documentation to show what change you’re in,” Kouchis said. “If you’re making a full repayment, you want something to show that you’ve made your one-time payment and that your loan has been reinstated. . “

CFPB officials agree that communication and documentation are essential.

“It’s important if you’re having trouble as a homeowner to get your documents together, stay engaged and not fall into deeper issues,” Brown said.

Basically: It’s easier to be proactive and avoid problems than to try to fix them after the fact.

At the end of the line

The pandemic threw many mortgage holders into uncertain positions, and while forbearance offered some temporary relief to many, the payment hiatus was never going to last forever.

“It’s a very stressful and often nerve-racking experience,” said Brown.

To this end, it is essential that borrowers are in contact with their lenders early and often about how their forbearance plan is structured, and to stay in touch after protection ends. Especially for those who will still have trouble making payments, educating yourself about the options is essential to avoid bigger problems in the future.

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About Teresa G. Wilson

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