Reverse CFPB mortgage complaints slow in 2022

The number of consumer complaints to the Consumer Financial Protection Bureau (CFPB) related to the reverse mortgage product category initially spiked briefly, but now appears to have slowed in 2022, RMD has learned.

That’s according to an analysis of the CFPB’s Consumer Complaint Database for data collected by the agency between January and August 2022. The average monthly complaint rate so far this year is around 35, but a peak for a month seems to have diminished. , and the average is still lower than the average figure seen at the end of last year, which also served as an overall peak during the COVID-19 coronavirus pandemic period.

Number of reverse mortgage complaints in 2022

According to the CFPB’s Consumer Complaint Database, a total of 314 consumer complaints regarding reverse mortgages have been submitted to the CFPB since January 1. In the fully recorded period between August 2017 — when the agency began tracking data at this level of detail — and January 2022, a total of 1,823 reverse mortgage complaints were documented by the agency.

On average, the number of monthly reverse mortgage complaints was just over 39. However, this average is also affected by a noticeable increase in reverse mortgage complaints recorded by the agency over the of April, which reached 54. Since then, the number of complaints related to reverse mortgages has steadily decreased each month, from 42 complaints received in May to 29 in August.

While the nature of the complaints again varied, the predominant subject in the majority of those received by the CFPB related to “problems during the payment process”, which represented 130 complaints, or 41% of the total. “Difficulty paying the mortgage” was the second most common reason with 67 complaints, or 21.3% of the total. “Applying for a mortgage or refinancing an existing mortgage” is not far behind, accounting for 57 complaints or (18.1% of the total). This was followed by ‘closing a mortgage’, accounting for 55 complaints (17.5%).

In terms of the locations of registered complaints in 2022, California once again had the highest number of reverse mortgage complaints in the country, with 70 registered in the state this year. They were followed by Florida (37), Texas (24), Illinois (17) and New Jersey (11) to complete the top five. Maryland, Massachusetts and North Carolina all tied for sixth place with 10 complaints each.

How 2022 affects pandemic-era complaints

Between August 2017 and February 2020 – a month before the declaration of a pandemic by the World Health Organization (WHO) and a national emergency by the White House under former President Donald Trump – the number of complaints from reverse mortgages received by the CFPB averaged about 30 complaints per month. From the start of the pandemic in March 2020 until the end of August 2022, the monthly average over the majority of the pandemic period is slightly lower at 29.6 per month.

During the current pandemic period, the single month with the highest number of reverse mortgage complaints was April 2022, surpassing the previous record set in November 2021 of 51 complaints recorded by the CFPB.

Relief programs

With 21.3% of total complaints once again centering on a struggle to pay the costs associated with a reverse mortgage, the nature of existing borrower relief remains a significant issue in addressing potentially delinquent reverse mortgages. .

With the passage of the American Rescue Plan Act in 2021, a $10 billion Homeowners Assistance Fund (HAF) was created to provide financial assistance to mortgage borrowers who have been negatively impacted by the current economy. . Reverse mortgage borrowers who have problems paying associated fees such as taxes and insurance are eligible for such relief.

However, getting the word out to reverse mortgage borrowers has proven challenging across the board: for the U.S. Department of Housing and Urban Development (HUD), for reverse mortgage lenders and managers, and for consumer protection.

“These HAF programs in all states, territories and tribal lands can play a very important role in helping mortgage borrowers who have fallen behind on their home charges, especially those who have fallen behind during the pandemic,” said Sarah Bolling Mancini. , attorney for the National Consumer Law Center (NCLC) at a meeting of the HUD Housing Counseling Federal Advisory Committee held last month. “So that’s an important source, but unfortunately it’s not going to be a silver bullet, for a number of reasons.”

Some of the barriers she mentioned include the idea that states that still offer HAF relief applications do not sufficiently publicize the qualification of reverse mortgage borrowers, and the fully online process of an HAF application can also be used. obstacle for reverse mortgage borrowers who were to be at least 62 years old at the time of the granting of their loan.

Originators and Obtaining HAF Relief to Reverse Mortgage Borrowers

At a reverse mortgage industry event in May, service professionals addressed an audience of industry professionals and explained that loan originators may be in the best position to inform borrowers of their ability to seek HAF funds if they need assistance.

“We did everything we could imagine,” Celink’s Gail Balettie said in May of communicating to reverse mortgage borrowers. “I’ve had HAF messages on my statements since January, we do outbound phone campaigns, we have it on our website, we do email campaigns, everything other than hiring carrier pigeons .”

Visit the CFPB Consumer Complaint Database.

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