Podcast
Questions and Answers
What should lenders do when they receive a substantial consumer complaint?
What should lenders do when they receive a substantial consumer complaint?
What consequence may arise from unresolved consumer complaints?
What consequence may arise from unresolved consumer complaints?
Which organization maintains a searchable database of consumer complaints?
Which organization maintains a searchable database of consumer complaints?
From whose perspective should complaints be evaluated to determine their validity?
From whose perspective should complaints be evaluated to determine their validity?
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What is one role of the Better Business Bureau?
What is one role of the Better Business Bureau?
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What should lenders do if there is a pattern in the complaints received?
What should lenders do if there is a pattern in the complaints received?
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Which entity pursues complaints related to FHA loans?
Which entity pursues complaints related to FHA loans?
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What should MLOs do to minimize consumer complaints?
What should MLOs do to minimize consumer complaints?
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Study Notes
Handling Borrower Complaints
- Mortgage lenders should resolve consumer complaints amicably, similar to other consumer-oriented businesses.
- Even a single substantial complaint requires investigation, as it could indicate legal or lending policy violations.
- Unresolved complaints can damage reputation, lead to fines, license loss, loss of secondary market investor access, and lawsuits.
- State and federal agencies address consumer complaints.
- The CFPB (Consumer Financial Protection Bureau) accepts and pursues consumer complaints, maintaining a searchable database of complaints.
- CFPB defines pursuable complaints as dissatisfaction or suspicion of wrongful conduct related to a consumer’s financial experience.
- CFPB uses complaints when creating, updating, and interpreting regulations.
- The Better Business Bureau assists consumers with general business complaints.
- State Attorneys General investigate complaints within their jurisdiction, often referred by mortgage licensing authorities.
- The FTC's Consumer Sentinel gathers data on illegal activities, unethical practices, and scams.
- HUD handles FHA loan complaints and discrimination claims.
- VA and USDA handle complaints related to loans they guarantee.
- State regulators may pursue complaints, sometimes triggering regulatory investigations.
- Misunderstandings are a common cause of consumer complaints.
- Evaluate complaints from a "reasonable consumer" perspective.
- Valid complaints should prompt changes in practices, especially if a pattern exists.
- Misunderstandings due to lender representations (advertising, etc.) should necessitate improvements in communication.
- Mortgage Loan Originators (MLOs) must follow company procedures and act ethically, legally, honestly, and directly to reduce complaints.
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Description
This quiz explores the essential processes for handling borrower complaints within the mortgage lending industry. It emphasizes the significance of resolving issues amicably to avoid potential legal repercussions and reputational damage. Learn about the roles of different agencies in addressing consumer complaints.
