Rising Number of Complaints in the Reverse Mortgage Industry
One in three complaints in the mortgage industry were from borrowers struggling to pay their mortgage, with nearly half of these related to foreclosures. The other half involved communication issues with companies regarding modifications, forbearance, short sales, deed-in-lieu, bankruptcy, or foreclosure.
13% of complaints were related to loan applications or refinancing, mostly stemming from communication issues with companies. Another 10% of complaints were related to problems with loan closings.
Out of 298 complaints, 217 were submitted online, 56 over the phone, 18 were referred, and seven were handled via mail.
The top 10 reverse mortgage lenders had varying numbers of complaints, with Onity Group Inc. (parent company of PHH Mortgage Corp. and Liberty Reverse Mortgage) leading at 95 complaints. Other lenders with complaints included Finance of America (27), Longbridge Financial (11), and Mutual of Omaha Mortgage (8).
Most complaints were responded to in a timely manner and closed with an explanation. Only one complaint resulted in monetary relief for the complainant, while 14 remained open as of Jan. 24.
Peer Advisors LLC, the parent company of Celink, received 51 complaints, reflecting a trend of increased monthly complaints in the reverse mortgage industry from 2020 to 2022.
The CFPB report highlighted consumer frustrations with getting statements or payoff amounts from lenders, as well as difficulties in making payments or paying off mortgages.
Reverse mortgage complaints represented a small share (1.4%) of all mortgage industry complaints, with conventional mortgages accounting for the majority of complaints (12,853).
While reverse mortgage complaints saw a spike in January 2022, they have since been on a downward trend after steadily decreasing from 2016 to 2020.