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How Effective is the CFPB?

The Trump administration entered the White House on a promise to examine and possibly eliminate many Obama-era initiatives, including the Consumer Financial Protection Bureau (CFPB). Trulia wanted to know a few things about the CFPB‒‒namely  where consumers have asked the bureau for help in resolving mortgage disputes, who’s doing the asking, and what types of loans the CFPB deals with‒‒before the CFPB comes under more intense scrutiny or sees its mission changed.

What Trulia found was that if the bureau is eliminated or even streamlined , it “could be a blow for thousands of mortgage borrowers who have used the CFPB’s dispute resolution to act as an intermediary in their cases," according to a report issued Wednesday. In its first five years, Trulia reported, CFPB has returned more than $11.8 billion from financial institutions on behalf of 29 million consumers.

“The borrowers don’t always win, but the CFPB offers the much-needed guidance and consumer protection that was sorely lacking a decade ago,” the report stated.

Trulia reported that the CFPB has handled 224,796 home loan complaints (about a half-percent of U.S. mortgages) in its first five years, and that Americans 62 and older and military service members, combined, make up 15 percent of all complaints

"That’s a high rate given just 35 percent of seniors who own a home have a mortgage,” the report stated.

According the U.S. Census Bureau, by the time most Americans turn 65, roughly 80 percent own their own home and just 35.8 percent have a mortgage,. By contrast, 83.8 percent of those 45-54 years of age, who own a home have a mortgage.”

Thirty-one percent of complaints revolve around standard fixed-rate mortgages, but 38 percent revolve around “other” issues not including ARMs, reverse mortgages, FHA loans, or VA loans.

Trulia also reported that expensive and hard-hit markets lean most on CFPB. San Francisco saw complaint rates of 0.73 percent of all mortgages held there, which is nearly twice the national rate  of 0.46 percent. Washington, D.C. zip codes had complaint rates of 1.29 percent

Miami, Asheville, and Atlanta had the highest percentages of complaints among mortgage holders in specific metros, all between 1.5 and 1.6 percent. The New York metro area featured three zip codes with complaint rates that landed in the top 10: New Rochelle, (1.25 percent), Far Rockaway (1.23 percent), and New York City (1.14 percent).

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.

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