What Should I Do If I Have A Complaint Against My Lender?
What do you do if your mortgage lender is engaging in unfair trade practices or lending habits? There are several federal and state laws that regulate the business of mortgage lenders. Therefore, if you are aggrieved by your home loan lender, you can seek recourse from a number of government agencies at the federal and state level.
How to Resolve Disputes with Mortgage Lenders
All complaints start as disputes. If you have a dispute with your lender, you should try resolving it internally with the mortgage lender first. You can reach out to the institution’s local branch manager or get in touch with customer service personnel through the contact information on the institution’s website. Explain your problem and give supporting information such as your loan number and relevant documentation. If the manager or customer service personnel promise to look into the matter, request a timeframe by which you can expect the matter will be resolved. Remember to follow up.
If you cannot reach the manager or customer service people, send a letter formally to the institution’s main office clearly outlining the problem at hand and how you would like it resolved. Include copies of the transaction’s documentation. Keep a copy of the letter.
If these efforts do not bear fruit or if you do not have your complaint resolved, you can report the problem to a regulatory agency.
There are a number of federal and state agencies qualified to handle complaints against mortgage lenders. Here are a few agencies you should be aware of:
- Consumer Financial Protection Bureau (CFPB)
The CFPB is mandated to enforce the Equal Credit opportunity Act. This federal law outlaws discrimination by mortgage lenders of persons on such grounds as age, gender, race, ethnicity, marital status or religion. If you have been denied a loan based on any of those grounds, you can file a complaint with the CFPB through their website.
The CFPB is also authorized to enforce the Truth in Lending Act. This law requires mortgage lenders to reveal certain details about the loans they are offering to homebuyers before the purchase is made and afterward. Therefore, you can file a complaint with the CFPB if it relates to:
- Nondisclosure of mortgage fees, rates and charges
- Misrepresentation with regard to mortgage fees, rates and charges
- Difficulty applying for, refinancing or transferring a mortgage
- Misreporting mortgage loan status to credit reporting bureaus
- Payment applications.
- Federal Trade Commission
The FTC is mandated to determine complaints involving unfair or deceptive trade practices by mortgage lenders such as misleading statements by a mortgage lender on its loan abilities, fees charged by mortgage lenders for services that were not provided, willful omission of material statements and illegal mortgage debt collection tactics.
- US Department of Housing and Urban Development (HUD)
This agency enforces the Fair Housing Act, which prohibits discrimination from buying a home or getting financing for a home. It also enforces the Real Estate Settlement Procedure Act (RESPA), which regulates how mortgages are originated, serviced and sold. You can file a complaint with the HUD for discrimination by your lender or for problems on how your loan was obtained or financed.
- California Department of Business Oversight
All mortgage lenders operating in California are required to obtain a license from the state and adhere to the states’ laws regulating the conduct of banks and mortgage lenders. You can file a complaint against a mortgage lender with the state’s Department of Business Oversight or through the state’s Attorney General Office.