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?
- Dismiss it as a misunderstanding
- Ignore it if it seems minor
- Amicably resolve it and investigate (correct)
- Report it to the media immediately
What consequence may arise from unresolved consumer complaints?
What consequence may arise from unresolved consumer complaints?
- Irreparable damage to reputation (correct)
- Better business opportunities
- Improved customer relations
- Increased consumer trust
Which organization maintains a searchable database of consumer complaints?
Which organization maintains a searchable database of consumer complaints?
- Better Business Bureau
- FTC
- CFPB (correct)
- HUD
From whose perspective should complaints be evaluated to determine their validity?
From whose perspective should complaints be evaluated to determine their validity?
What is one role of the Better Business Bureau?
What is one role of the Better Business Bureau?
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?
Which entity pursues complaints related to FHA loans?
Which entity pursues complaints related to FHA loans?
What should MLOs do to minimize consumer complaints?
What should MLOs do to minimize consumer complaints?
Flashcards
Why are consumer complaints serious?
Why are consumer complaints serious?
Complaints from consumers about mortgage lenders are serious matters and can lead to legal issues, fines, and damage to reputation.
What does the CFPB do with consumer complaints?
What does the CFPB do with consumer complaints?
The CFPB investigates consumer complaints about financial products and services. They gather data to write and update regulations.
Who is a 'reasonable consumer'?
Who is a 'reasonable consumer'?
A reasonable consumer is someone who understands typical consumer practices and expectations.
How should lenders address misunderstandings caused by their communication?
How should lenders address misunderstandings caused by their communication?
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What is the role of an MLO in handling complaints?
What is the role of an MLO in handling complaints?
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How can complaints be used to improve lending practices?
How can complaints be used to improve lending practices?
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What is the role of the BBB in consumer complaints?
What is the role of the BBB in consumer complaints?
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What is the role of State Attorneys General in mortgage complaints?
What is the role of State Attorneys General in mortgage 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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