CFPB Reports Decrease in Reverse Mortgage Complaints Amid Ongoing Consumer Challenges

In 2024, reverse mortgage complaints decreased to 298, mainly due to payment process issues, with Onity Group leading as the top complained lender.

In 2024, the Consumer Financial Protection Bureau (CFPB) reported a total of 298 complaints from consumers about reverse mortgages, marking a decrease of 63 complaints when compared to 2023.

Nature of Complaints

A significant portion of these issues—about 43%—arose from challenges during the payment process.

Consumers frequently struggled to contact their lenders or servicers, which hindered their ability to address problems related to loan management and servicing.

Additionally, nearly one-third of the complaints highlighted difficulties borrowers faced while trying to make their mortgage payments.

Impressively, around half of this group specifically reported problems related to foreclosure.

The remaining complaints mostly involved struggles with communication regarding loan modifications, options for forbearance, short sales, deeds-in-lieu, bankruptcy, and foreclosure situations.

Complaint Statistics

Furthermore, 13% of the overall complaints dealt with concerns related to applying for new loans or refinancing existing ones, with most frustrations stemming from the application process itself.

Complications during loan closings accounted for roughly 10% of the complaints.

Out of the total complaints filed, the majority—217—were submitted electronically, while 56 were communicated over the phone.

In addition, 18 cases were referred to other agencies and seven were sent through traditional mail.

Onity Group Inc., the parent company of PHH Mortgage Corp. and Liberty Reverse Mortgage, received the highest number of complaints among the ten leading reverse mortgage lenders, totaling 95.

Coming in second was Finance of America, with 27 complaints, followed by Longbridge Financial at 11 and Mutual of Omaha Mortgage with eight.

American Advisors Group (AAG)—now part of Finance of America—also recorded eight complaints.

CFPB Response and Trends

The CFPB responded quickly to most of these grievances, addressing 98% in a timely manner and providing explanations for nearly all closed cases.

By January 24, only 14 complaints remained open, and only one resulted in monetary compensation for the complainant.

Peer Advisors LLC, which manages the servicing for Celink, ranked second among complaint recipients with 51 filed against it.

A mid-2023 report from the CFPB indicated a striking rise in the average number of monthly complaints regarding reverse mortgages from 2020 to 2022.

This increase was attributed to recent shifts in how reverse mortgages are serviced.

Consumers consistently reported frustrations over obtaining clear statements or payoff amounts from their lenders, alongside issues related to making payments or closing out their mortgages.

In the grand scheme of consumer grievances within the entire mortgage industry, reverse mortgage complaints represented a small slice—just 1.4%—of the total 21,236 complaints registered.

Conventional mortgages were the primary source, accounting for 12,853 complaints.

After a steady decline in reverse mortgage complaints from 562 in January 2016 to 247 in January 2020, they peaked again at 425 in January 2022.

Yet, recent trends suggest they are now on the decline once more.

Source: Housingwire