For some reason, there has not been a great deal of buzz surrounding the CFPB complaint database thus far, but servicers could gain valuable perspective simply by understanding the process and how it works.
Having assisted in helping a friend file a complaint recently when I was appalled to hear her horror story when refinancing her home, I was impressed with the process’s overall ease of use and responsiveness, but also noticed some areas for improvement.
I thought by sharing my own observations—both good and bad—it might be beneficial for servicers to better understand the nuances of a system that is readily available to virtually any one of their customers to use at a heated moment’s notice.
One issue with the database that servicers should understand is that any complaint filed by users must be fully complete.
At the moment a user issues the complaint, there is no updating or changing it. Regardless if there are any holes or incomplete evidence, the complaint stands as filed. This means originators or servicers may never hear that a problem exists, and if they do hear, it may not be for the right problem. Therefore, they can get away with it without even a slap on the wrist or be trying to solve the wrong problem.
Without knowing about the real problem, they will not know to correct anything or the right thing, which is dangerous for the company’s overall wellbeing.
Now servicers have more problems to deal with than a shadow inventory of defaulted loans they now have to also be prepared for a shadow inventory of potentially erroneous complaints, all because the borrower can’t modify or edit their complaint.
Another point worth addressing is that the CFPB is tenacious when handling each and every complaint.
Each complete file is thoroughly addressed by the CFPB, who responds and promptly communicates with both the complainer and the lender or servicer responsible for the complaint to rectify the issue in a timely manner.
The CFPB appears to have created a solid technology platform that not only adequately vets each complaint, but manages the process and meets deadlines efficiently. Now if they can just add a modification feature, it will be more than adequate. Let’s hope they are working on it.
Servicers should also know that the CFPB is not necessarily going to be the sole problem solver for the complaint, and the regulatory body may direct the user’s complaint to a more appropriate resource.
It is not entirely unlikely that the CFPB may direct the user to another agency it oversees, such as the FDIC. At that point, the referral is not going to get the user any closer to a solution it is only taking him/her back to where he or she started in the first place.
If the CFPB directs the user to another regulatory body like this one, why doesn’t it just take care of it themselves? For now, this is clearly a rhetorical question, and I don’t have an answer.
It might be easy to criticize the CFPB, but the industry has earned this oversight from our mistakes of the past. Whether or not this oversight is the solution remains to be seen. Whatever your stance on the CFPB is, it is not going away, and it is now being fueled by the customers it serves to protect. So pay attention.
Alice Sorenson is chief investment officer of LRES, a national provider of residential and commercial valuations and asset management for the mortgage, banking, credit union and real estate industries.
