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Credit bureau disputes challenge mortgage industry

CFPB expects timely response to complaints

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The Consumer Financial Protection Bureau is putting servicers and lenders on the front lines by forcing them to thoroughly investigate consumer credit bureau disputes raised by borrowers.

The bureau said companies providing information to consumer reporting agencies need to review all relevant information provided when credit bureau disputes about debts surface.

"Credit reports play a critical role in the lives of consumers," said CFPB Director Richard Cordray.

He added, "Given the importance of these reports, consumers need to know that their documents are being reviewed when they dispute what they believe is a mistake on a report."

Although mortgage lenders and servicers only make up 7% of trade lines in regards to credit reported by consumers, industry experts believe this bulletin will force mortgage companies to address consumer complaints in a timely manner.

"When credit reporting is disputed or viewed as not accurate, the level of review and due diligence is not being met as satisfactory by the consumers," explained Fay Servicing chief compliance officer Loren Morris.

He added, "I think the bulletin will allow organizations to make sure that they have the necessary information, and should act responsibly to any dispute that a borrower may have in regards to their credit."

The goal of the bureau is to ensure that furnishers, including lenders and servicers, are meeting the policies put in place and reemphasizing the importance of handling complaints to make sure these procedures are maintained in the system.

However, Morris said most lenders and servicers already have some sort of investigative process in place.

"It’s not necessarily new to the industry, as much as it’s reemphasizing its importance and provides that the CFPB will be watching to ensure that the borrower's dispute is well handled," Morris explained. 

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