Responding to consumer complaints and inquiries has always been both a challenge and an opportunity for identifying issues and enhancing service delivery for mortgage servicers. It has become an increasingly critical area of focus as the Consumer Financial Protection Bureau (CFPB) evaluates the volume and nature of consumer complaints as part of their risk assessments.

As a world-class supplier to mortgage servicers of insurance tracking and lender-placed insurance, National General Lender Services is keenly aware of the importance of having an effective process to manage consumer complaints and inquiries to protect and support its clients’ reputation and investor relationships.  

In March 2015, the CFPB implemented its Complaint Database “structured response” approach which provides consumers the option to publicly share their complaint narrative. This approach was deployed despite concerns by many financial services providers that the narratives were “materially inaccurate,” and not verified for accuracy by the CFPB prior to publication.

CFPB Director Richard Cordray indicated that the ability of consumers to publish their narrative “empower[s] consumers by helping them make informed decisions.” Frank Keating, president and CEO of the American Bankers Association, in his letter to the Federal Reserve’s Office of the Inspector General (OIG) stated that “the public disclosure of unverified consumer complaint narratives doesn’t advance that goal.”

What does a servicer need to do to ensure compliance with the Regulation X requirements, protect itself from inaccurate negative publicity and comply with requirements to respond to complaints received directly from consumers or through the CFPB Complaint Database?     

  • Complaint management practices should be formally documented by mortgage servicers. This includes careful definition of what is considered to be a complaint and training of employees who interface with customers on the established complaint management practices.
  • Servicers should develop a system for logging complaints, tracking through resolution and analyzing for root cause and trends.
  • Root Cause Analysis (RCA) is necessary not only to resolve individual issues, but also to prevent similar issues from occurring in the future. RCA leads to process improvement and reduction in overall complaints, especially when resources within the servicer and its third-party service providers work together to identify all contributing factors.  
  • Held accountable by the CFPB for the activities of its suppliers, servicers should work diligently to understand borrowers’ experiences with third-party service providers.

When a servicer entrusts the borrower experience to a third-party provider, it is critical that the provider maintain a robust compliance program, employ tools that help them provide a positive customer experience and establish a collaborative relationship with the servicer.

Karen Frech, vice president of regulatory relations at National General Lender Services, stated, “Disciplined complaint management and reporting to our clients is a prime focus for National General Lender Services. Our complaint management system allows us to log and track complaints, provide our clients with robust reporting, conduct root cause analysis and provide executive oversight for sustained improvement.”

Art Castner, president of National General Lender Services, added, “From the extensive training of our customer care staff, which includes subject matter knowledge and de-escalation skills, to the logging of verbal and written complaints and subsequent analysis, we invest the effort and time to ensure we are effectively partnering with our clients in robust complaint management. We recognize that we are an extension of our clients’ brand, and we take that responsibility seriously.”

Servicers employing a systemic complaint and issues tracking process, coupled with provider partnerships that integrate the same methodology, will see enhanced customer service and adherence to regulatory guidelines.