Regulation

Servicemembers submit Mortgage, debt collection complaints to CFPB

cfpbA report released by the CFPB on Thursday showed complaints from servicemembers regarding mortgages and debt collection practices were among the top received by the agency, followed by credit cards, bank accounts and credit reporting.

From July 2011 to February 2014, the CFPB received more than 14,000 complaints from servicemembers, veterans and their families. Between 2012 and 2013, complaint volume rose 148 percent as awareness of the agency’s complaint system increased.

A majority—55 percent—of all complaints from servicemembers were related to mortgages, with the most common issues being loan modifications and servicing, collections or foreclosures.

“The complaints indicate that consumer confusion persists around the process and requirements for obtaining load modifications and refinancing, especially regarding document submission timeframes, payment trial periods, allocation of payments, treatment of income in eligibility calculations and credit bureau reporting during the evaluation period,” the report said. “In particular, military consumers have reported frustration with mortgage servicers’ lack of knowledge about military-specific programs.”

The report said consumers complained about servicers’ lack of knowledge regarding guidance from the CFPB and other regulators aimed at helping servicemembers with Permanent Change of Station orders.

Debt collection ranked as the second most common reported issue—accounting for 27 percent of complaints—among servicemembers, with the most common issues being continued attempts to collect a debt not owed, communication tactics, threatening illegal action and disclosure verification of debt.

Credit card complaints accounted for 14 percent of all complaints from servicemembers. The report said many consumers reported confusion and frustration with their limited ability to challenge any errors on monthly credit card billing statements.

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