There were a total of 131 consumer complaints submitted to the Consumer Financial Protection Bureau (CFPB) between Jan. 1 and June 10 of this year that were related to the reverse mortgage industry, according to a database maintained by the bureau. This was 52 fewer complaints compared to the same period in 2023.
Of these complaints, 42% were related to “trouble during the payment process,” which primarily had to do with customers seeking to contact their lender or servicer to fix an issue with the management or servicing of a loan. About one in three complaints had to do with borrowers “struggling to pay their mortgage,” of which a portion were specifically related to foreclosures.
Compared with recent years, the 131 complaints logged during the first six months of 2024 is lower than those recorded in 2023 (183) and 2022 (229), but it is slightly higher than the 119 recorded in 2021. These are customer-submitted complaints and only indicate some sort of dissatisfaction, not that any party committed wrongdoing.
The vast majority of the complaints this year (97.7%) were responded to “in a timely manner,” according to the database. The vast majority are listed as “closed with an explanation,” while four of the 131 complaints remain in process. One complaint is listed as “closed with monetary relief.”
The highest concentration of complaints (20) came from the state of California, long the most dominant state in the country in terms of reverse mortgage originations. The other leading states for complaints submitted to the CFPB during this period were Florida (17), Texas (11), Illinois (seven), Colorado (six) and New York (six).
Among the companies with the most complaints listed, Ocwen Financial Corp. — the recently rebranded parent company of Liberty Reverse Mortgage — is listed as the source of 43 complaints. Peer Advisors LLC — the parent of reverse mortgage servicer Celink — received 16 complaints.Finance of America (FOA) received nine complaints, while its subsidiary, American Advisors Group (AAG), received eight complaints.
The reverse mortgage industry comprised a tiny slice of the complaints across the broader mortgage market. Reverse mortgage accounted for 1.4% of the 8,954 mortgage-related complaints the CFPB received between Jan. 1 and June 10, 2024.
In mid-2023, the CFPB released a report that detailed a higher average share of monthly reverse mortgage complaints recorded between 2020 and 2022 when compared to prior years. At the time, the bureau said this could be attributed to changes on the servicing side of the business.
“In their complaints about reverse mortgages, consumers often express frustration in either getting statements or a payoff amount from their lender, or state that they are having difficulties making a payment or paying off a mortgage,” the bureau explained in its 2023 report. “In their responses, companies will sometimes apologize for the delay and provide the requested information. In other responses, companies will request follow up information from consumers.”
Reverse mortgage servicers also have to contend with a series of issues that are generally unique to the reverse mortgage space when attempting to contact borrowers about what could be important information. While some servicers have explained that the borrower’s original loan officer might be uniquely suited to help iron out some of these issues, LOs are also encouraged to go through the proper procedures when communicating with their borrower’s loan servicer.
“Sometimes loan officers don’t understand that their permission to discuss [the loan] ends after the loan closes,” Gail Balettie, senior vice president of client satisfaction at Celink, said during a panel dicussion at a 2022 reverse mortgage industry event.
“If you want to help a borrower in the servicing world, it’s important that you get a third-party authorization from that borrower in writing. We can’t talk to you about the servicing of the loan until we have that.”
