The Consumer Financial Protection Bureau (CFPB) published a report this week detailing the negative experiences of homeowners faced with their mortgage company after divorce or the death of an original borrower.
According to the CFPB, many homeowners claimed their servicers pressured them into taking new and higher-interest loans instead of keeping their existing mortgage. Homeowners also reported recurring requests from servicers for the same or updated documents extending over months and sometimes years, at the same time they are dealing with the death of a loved one or a divorce.
Furthermore, some homeowners reported that servicers ignored their requests to remove the original borrower from the mortgage, even when the successor homeowner has been making all payments on the mortgage for years.
The CFPB report also noted that domestic violence survivors face additional problems with servicers, including mortgage companies continuing to send critical mortgage information to the abuser that risked putting the survivor’s safety at risk. When confronted with these issues, the servicers mostly blamed investor requirements, processing volumes, or “systems issues,” rather than accepting responsibility for their tactless and often dangerous customer service.
“When someone loses a spouse or goes through a divorce, the last thing they need is their mortgage servicer giving them the runaround or pushing them into an unaffordable loan,” said CFPB Director Rohit Chopra. “Mortgage servicers have clear obligations under federal law to help these homeowners.”
The report is now available online.
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