Mortgage servicers received less complaints at the Consumer Financial Protection Bureau (CFPB) in the fourth quarter of 2020, according to data from Inside Mortgage Finance.
The data showed that mortgage protests overall decreased by 6.7% in the fourth quarter, while complaints about loan modifications dropped 10.1%, servicing concerns dropped 6.7% and criticisms about applications fell 8.6%.
But while these complaints were down for the final quarter of the year, overall in 2020, the CFPB saw an increase of 8.2% in mortgage-related complaints.
This revelation comes after the CFPB’s new Acting Director Dave Uejio promised swift action against mortgage servicers in an upcoming regulatory crackdown. Uejio told CFPB staff in an email that the bureau will direct its attention to mortgage servicers, promising “aggressive action” to ensure companies follow the law.
The greatest areas of concern for Uejio surrounded servicers’ handling of CARES Act forbearances such as failing to process accounts or providing homeowners with incorrect or incomplete information.
As call volumes have spiked to a level not seen since last April, lenders and servicers need to prepare for a significant increase in their workload as they help borrowers through difficult times.
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But this comes in direct contrast to another government agency’s view. In October 2020 at the Mortgage Bankers Association Annual convention, Federal Housing Finance Agency Director Mark Calabria took the opportunity to recognize the effort servicers were making to help borrowers in forbearance and even thanked them.
And this week, the FHFA touted its accomplishments under the CARES Act, pointing out the low levels of foreclosures and delinquencies. In its blog, the FHFA said the CARES Act provided an option for homeowners with federally backed mortgages to request forbearance for up to 180 days, but said that even borrowers of non-covered mortgages were offered a similar option from their servicers.
The FHFA stated that while the true effects of the CARES Act may not be fully known for months to come, clearly borrowers saw a benefit as evidenced by the low level of delinquencies on credit reports.
“During 2020, mortgages reported to the credit bureaus as having payments 30 or 60 days past due plunged to 1%,” the FHFA states. “The percentages over the past year for mortgages that were 90 to 180 days past due (0.6 %) and mortgages in the process of foreclosure, bankruptcy or deed-in-lieu (0.3 %) remained flat. As a result of these trends, the median credit score of mortgage borrowers, as measured by VantageScore on borrowers of active mortgage loans, has actually risen slightly in 2020. In contrast, the share of accounts that were reported as more seriously past-due rose sharply in 2009 after the Great Recession and consumer credit scores also suffered.”