(NNPA)—Many times consumers question whether complaining about a financial problem will ever do any good. Now, thanks to a new initiative by the federal Consumer Financial Protection Bureau, no one needs to wonder anymore. Beginning Dec. 1, the consumer watchdog agency is asking consumers to tell them about unfair or illegal practices that occurred before, during or after getting a mortgage loan. The agency promises to give every complaint a fair review, and it will also use the information gathered as a guide when considering new consumer protections.
The CFPB should expect to get an earful. A wealth of research documents how communities of color have borne the brunt of predatory lending and the foreclosures that followed. Too many African-American and Latino borrowers received high-cost, risky mortgages when they could have qualified for lower-cost and more sustainable loans. Now foreclosures are happening more quickly in communities of color than anywhere else—a curious phenomenon when one considers that White homeowners hold far more of troubled home loans. By one estimate, Black and Brown communities have lost $350 billion of wealth during this Great Recession, according to the Center for Responsible Lending. Even worse—these communities already had the least to lose.
During the subprime boom and long before the CFPB was formed, there was no shortage of mortgage-related complaints—but very few received serious consideration. Responsibility for mortgage protections was parceled out among at least half a dozen regulatory agencies, some of whom were very friendly to the lenders they were supposed to be monitoring. Now, with the CFPB on the job, we can expect a much sharper focus on consumer complaints and a stronger commitment to resolving them.
For any doubting Thomas that remains cynical about progress on consumer complaints, consider what happened when the CFPB asked the public to share their problems with credit cards. Between July 21 and Oct. 21 this year, the Bureau received 5,074 complaints. Of these complaints, 74 percent have now been resolved. Issues raised involved billing disputes, identity theft and other fraud.
We now know that 397,000 African-American families lost their homes on mortgages made between 2004 and 2008. Some opponents of reform try to blame affordable housing programs, but the facts don’t support that position. Wall Street became ravenous for the most dangerous types of loans, and lenders obliged by aggressively marketing them without bothering to underwrite. Moreover, CRL’s most recent research shows that borrowers of color with higher incomes and good credit scores received riskier loans than similar white borrowers.
The result has been tragic for the families involved and also crippling to the entire economy. The CFPB represents a genuine effort to make sure this doesn’t happen again. The Bureau is now open for business, and it wants to hear consumers’ side of the story. Individuals may file complaints related to any part of the mortgage process, including the wrongful denial of a loan, overcharges on lending fees, problems with the way mortgage payments are collected, and abuses related to foreclosures.
For more information, visit the CFPB website at https://www.consumerfinance.gov/. Specific mortgage complaints may be filed at: https://rspnsb.li/uTxRb5.
To learn more about what’s at stake for everyday Americans and how CFPB can help protect consumer financial interests, visit CRL’s web at: https://rspnsb.li/s915qX
(Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at: Charlene. crowell@responsiblelending.org.)
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