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We are encouraged, however, that the federal government is taking some steps to address that unresponsive and negligent banking and credit institutions are a huge part of what landed our country as a whole in the precarious financial situation in which it now finds itself. And that seems to be part of what this hotline is about.
It is a way for consumers to fight back when your mortgage lender has refused to work with you when you needed a loan modification or when your provider switched you to a more expensive home loan than what you originally signed up for.
The Consumer Financial Protection Bureau's home mortgage complaint and dispute resolution hotline hasn't gotten much press since it went live at the beginning of December. And that's because the bureau itself has wanted to keep it quiet, knowing that making it widely known would create a tidal wave of complaints, which might have the effect of overwhelming lenders and making the program less effective.
The bureau itself was founded in 2010, with the goal of serving as a watchdog for consumers in the arenas of home loans, banking and financial products. There was already a hotline for credit-card inquiries and disputes, which started last summer, and now the mortgage complaint hotline is up and running.
It works like this: The borrower/consumer files a complaint with the bureau, which will have all the important account numbers and other information. That complaint then is forwarded directly to the mortgage provider or lender, using a secure, online database. The bank must look over the information, get in contact with the customer if necessary and then figure out what action to take to resolve the issue. Then, the lender has to report that action to the bureau, which then passes it back on to the borrower to determine if the action was satisfactory. Throughout the entire process, the consumer can login using the secure, online portal and get updates on what's happening with the complaint.
Complaints may also be forwarded to other agencies when it's deemed appropriate. For example, law enforcement may get involved if there is an issue of identity theft or fraud.
Essentially, it provides some form of oversight and accountability for these large lending institutions, which have been at the root of so much of this country's financial woes. It's not yet clear, though, how effective this agency will be. There are some concerns that the bureau is writing checks it can't cash - in other words, making promises it might not necessarily be able to keep.
It remains to be seen. One measuring stick that may be useful is the figures that are reported on the success rate of the credit card complaint line. On this line, the bureau has received more than 5,000 complaints. Of those, about 85 percent went back to the issuers of the card. When those companies reported back to the bureau, about 75 percent said the problem had been resolved. Of those, about 71 percent of customers didn't dispute that the problem had been resolved. Little more than 10 percent of consumers said they weren't happy with the outcome.
Certainly, the mortgage complaint hotline isn't going to fix all of the country's housing woes - and it's no replacement for a qualified mortgage loan modification or bankruptcy attorney - but it is yet another tool consumers have in their toolbox.
The Nader Law Firm will provide a free consultation to help guide you in making a decision that works for you. In Encino, Glendale and Los Angeles, just call 1-800-568-0707.