CFPB Mortgage Complaint Portal Does Disservice to Consumers, Lenders

The Consumer Finance Protection Bureau (CFPB) just dealt the mortgage industry another low blow by setting up an ill-advised consumer complaint portal on their website.

The portal doesn't ensure that the consumer complaints, that the CFPB solicits and posts, are valid, does not give financial institutions an equal opportunity to respond and does not sufficiently protect consumers privacy. 

Both CFPB and mortgage industry data show that very few consumer complaints submitted to the Bureau actually warrant any action beyond an explanation.

Finally, the posting of unverified consumer complaints, under the imprimatur of the federal government, are bound to mislead the very consumers the CFPB is charged with protecting. 

This practice needs to come to an immediate halt. 

Fee Mistakes And "Right To Cure"

The big QM question about creating a method of curing fee mistakes, that exceed the allowable maximum, under QM regulations, is coming to the table.  The Mortgage Bankers Association and American Bankers Association have jointly asked the CFPB to allow a little more time for input, discussion and compromise.  Lenders have high hopes that they will come away with a regulation allowing a 180 day “right to cure” from the time the over charge is identified via any number of audits.

Currently, there is no method of curing such mistakes.  Lenders are now required, by regulation, to re-purchase the mortgage and re-originate it in a conforming manner. This is a draconian way to handle, what could be as little as a $150 miscalculation in closing costs.  The ability to cure would be fair to the consumer as well as limit borrowing costs, which would surely rise, as a hedge against the certainty of mortgage buybacks.  The right to cure will be a fair and equitable economic response that is more in line with the spirit of the regulation.