In January 2012, the Consumer Financial Protection Bureau (CFPB) proposed creating a free, public database for consumers to file complaints against virtually ANY financial product, service, company, or person. Financial firms urged officials to reconsider. “Posting company names without verifying the accuracy of the complaints levied against them,” wrote the Consumer Data Industry Association, “would unfairly cast reputable professionals and businesses in the shadow of possible guilt.”
Despite protests, the database went live in June 2012. Since then, over 90,000 complaints have been filed against companies regarding credit cards, student loans, banking issues, credit scores, and of course, mortgages.
While the CFPB does NOT verify the accuracy or facts regarding complaints (Really??? Wouldn’t you think that important??), it does route the information to the banks, which have 15 days to acknowledge that the person is a customer. If the company confirms the relationship or if it does not respond by the deadline, the information goes live online. Entries do not include the complainant’s name, just the zip code, the name of the bank, and the nature of the dispute.
Despite these shortcomings, and without ANY representation from the CFPB to the legitimacy of these complaints, some interesting statistics have come to light:
- Of the over 90,000 complaints received, approximately 52,000 were mortgage-related complaints.
- Of these 52,000 complaints, 3,564 complaints pertained to the origination of a mortgage. (The balance of the complaints involved servicing, problems with escrow accounts, loan modifications, foreclosure actions, credit decisions, closing costs, etc.)
- Of these 3,564 complaints, 2,745 were against banks. 797 were against mortgage bankers. And a whopping 22 total were against mortgage brokers.
There you have it. According to the CFPB’s not-so-scientific statistics, mortgage brokers have received only 22 complaints nationwide, a 0.0436% negative feedback reading against the mortgage broker community.
There’s a public perception that all (mortgage) complaints are against mortgage brokers when their own (the CFPB) data shows otherwise, discussed Donald J Frommeyer, President of the National Association of Mortgage Brokers (NAMB). “The data released by the CFPB shows that mortgage brokers receive the least amount of complaints of any origination channel,” added Richard M Bettencourt Jr., Chairman of the NAMB Government Affairs Committee.
So in the end, despite all of the negative – and often inaccurate – press that’s been thrown at mortgage brokers, statistics once again demonstrate that mortgage brokers tend to be the highest caliber mortgage originators in the industry.
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.