Garth Graham is a partner with Stratmor Group and has more than 25 years of mortgage experience.
Garth Graham is a partner with Stratmor Group and has more than 25 years of mortgage experience.

Everybody has a story. You can test this if you don't believe me by walking up to the next mortgage loan officer you see and asking them about the worst borrower they have ever worked with. Oh, the stories you'll hear. 

Of course, consumers have their side of the story, too. The question of the moment is, who should hear that story first, the CFPB or the financial services company already involved with the consumer?

The Internet has put us closer to borrowers than ever before. And recently, we have become closer still (some might say too close for comfort).

The Consumer Financial Protection Bureau, despite the cries from just about every industry group, has moved forward on its plan to allow disgruntled consumers to publicly share narratives in addition to simple complaints on the Bureau’s very public website.

Or, as veteran industry columnist Lew Sichelman wrote recently in "Gripes Will Have Some Bite," for National Mortgage News, consumers can now tell "their versions of what went down."

Sichelman quotes remarks by CFPB Director Richard Cordray from the press release introducing the new policy that states "the complaints have helped the bureau understand the issues consumers face when dealing with lenders and collection companies."

He also said that these complaints had already led to dozens of new regulations (is that the good news or the bad news?).

This is not what we in the industry probably want. But as MortgageSAT data indicates, if you ask someone to tell you their story, they probably will.

It's unclear whether the CFPB actually cares who hears the story first, as long as consumers have a chance to tell it.

As Cordray explained in the release, "The narratives may encourage companies to improve the overall quality of their products and services, and more vigorously compete over good customer service."

I don't know about you, but when I was a loan officer, I wasn't all that interested in vigorous competition from others. Most of us will likely do better without it.

But with the CFPB offering this new functionality to consumers, one of our best options to short circuit that level of competition is to get those stories out of our borrowers before they take them to the CFPB.

Financial services companies need to ask their consumers, analyze the data and listen to the results.

Will consumers be willing to share stories about their dissatisfaction with you? Evidence points to yes. As Sichelman pointed out in his column, Stratmor's MortgageSAT has surveyed 24,000 borrowers so far about their recent loan origination experience.

Most borrowers say they are highly satisfied, but about 8% rated their satisfaction at 6 or below on a 10-point scale. Of those folks, 80% are likely to post a negative comment somewhere, four times more than the highly satisfied customers.

Smart lenders are letting them post that into a tool they control instead of letting them take it to the CFPB.

Sichelman pointed out in his column that over the last few years, gripes about mortgages have steadily declined. He thinks this either means lenders and servicers have cleaned up their acts, rather than risk being outed in a high-profile database, or consumers have simply given up in their quest for justice.

MortgageSAT is in use in enough lenders today that we can definitely say that lenders and servicers are working to do a better job of meeting consumer expectations, but work remains to be done.

It’s unlikely that consumers have given up and any company that bets on that might lose everything to a federal regulator that is serious about industry compliance.

Listening to unhappy customers is just the start. In my next column I am going to discuss options on how to get the most out of happy customers. I am pretty sure the CFPB has not yet focused on that segment.

Garth Graham is a partner with Stratmor Group and has over 25 years of mortgage experience.