Consumer Mortgage Complaints Highlighted in Latest Report from CFPB

It looks like consumers are still having a lot of issues when it comes to the servicing of their mortgage loans. Additionally, lots of people have been complaining about it being difficult to make their loan payments to their lenders. All of this information comes via the most recent monthly complaint report from the folks over at the Consumer Financial Protection Bureau. As of the beginning of April, the CFPB has taken in almost 856,000 consumer complaints related to the various financial products/services that the bureau currently regulates.

A Breakdown of Consumer Complaints made to the CFPBquestioning-nerd

In this report, there were listed 5,111 complaints related to mortgage issues filed in March of this year. That makes for a 13 percent increase from the previous month. There were also a little over 4,600 mortgage complaints that came in during the first quarter of 2016. That is an over 20 percent increase from the 3,800 complaints that came in during the first quarter of 2015. Going back to when the CFPB first started taking and keeping track of complaints from customers – back in 2011 – the average number of mortgage complaints per month is 4,217. As of right now, nearly a quarter of a million mortgage complaints have been filed altogether.

Nearly 51 percent of mortgage-related consumer complaints had to do with people having a difficult time paying their mortgage properly. Across the country, the CFPB reported that the monthly average number of complaints about debt collection complaints comes in at 6,818. Overall, the debt collection industry is responsible for nearly 26 percent of all complaints as of the beginning of the 2016 second quarter. Student loan debt complaints took their biggest leap so far, with an increase of 83 percent, due to 1,154 complaints logged in March.

Other Consumer Complaints in the CFPB Report

In the CFPB’s latest report, consumer complaints from the state of California were singled out. In this state, consumers logged 118,900 complaints to the CFPB as of the first of April. Mortgages appear to be the most complained about financial product in this state, which makes sense when the national trends are looked at. Debt collecting in California, however, seems to be less problematic than it is across the country. Debt collection complaints in California accounted for about 24 percent of all the complaints officially received. Of the five highest population states, California had the greatest overall leap in consumer complaint volume, with a growth of about 16 percent, when the stats from the first quarter of 2015 and 2016 were compared.

The Origins of the Consumer Complaint Database

The online source that consumers can use to log complaints about the financial industry is officially called the Consumer Complaint Database. It began in 2012 and was intended to be an online source for consumers to submit feedback and complaints about financial products/services directly to the CFPB. The CFPB is responsible for maintaining this data and following up on the complaints that are logged. Additionally, the CFPB makes regular reports that highlight the most troubling issues, as well as providing a general idea of consumer issues to the general public.

CFPB Needs to Make Better use of its own Consumer Data

With the CFPB making it a point to target industries, like the payday lending industry (which receives almost no complaints made to the CFPB database) it makes one wonder when the bureau will get its priorities together and begin to focus its resources on the sectors that are so far responsible for the lion’s share of consumer complaints.

One Thing Rich People do that we ALL Need to Start Doing Right Now

By now, most of us know that it is wise to put money away in savings, and that we should all be doing this more than we already are. However, saving money is not always easy. One group that has seemingly no problems saving money, however, is the richest people amongst us. The super wealthy seem to have this whole saving money thing down to a science.Save-Money-1-537x402

This should not surprise any of us, but the reason that the super wealthy are able to put money aside is not simply that they have more of it to play with. A recent survey conducted by the Bank of America U.S. Trust – the division of the bank that manages private wealth – found that a large portion of wealthy individuals actually started the habit of saving money back when they were teenagers. The survey drew data from about 700 people, and was designed to offer insight at the behaviors and attitudes of very rich people. The respondents in this survey had to have a minimum of $3 million in assets, and 30 percent of them have in excess of $10 million.

More than anything, this report shows the discipline and responsible behavior that wealthy people seem to adopt early on in life. On average, the study shows that these folks started seriously saving money when they were around 14 years old. This should not be surprising, as other studies have shown that about half of teenagers in this country have some type of savings account. We must consider the fact that many rich people are born into money. Still, though, the fact that they start to save money early on could be because they have financially responsible people around them more so than any innate ability that they have to make saving money a priority.

However, the study showed something unique with regards to when these people started working for income and investing money in stocks. Most of them started working regularly at 15 and started investing in stocks at 25. These figures are a bit different from the rest of the population, where most folks start working when they are 16. And data from a Fed report shows that just under 14 percent of total U.S. households own any stock at all.

Another interesting thing that can be learned from this survey is just how these people were able to build up so much monetary wealth. Across the board, about 52 percent of their wealth came in via regular income, and 32 percent came in from outside investments. Related studies seem to show that most of this wealth winds up going into savings accounts of one form or another. Published data shows that most households that save only put about 5.4 percent of their money into savings, while the wealthiest one percent of the country manages to sock away as much as 51 percent of their money.

Most of us don’t have the luxury of being born into a lot of money. And the majority of people in this country don’t really take time to learn a lot about finances. However, we can all see that wealthy people clearly value saving money as a lifelong habit – and one that it started off early in life. The rest of us may not be able to save as much as those folks, but we can benefit from the lesson learned and begin to put as much of our income away in savings as possible. That way, we can be prepared for emergency expenses, retirement and maybe even have some left over to pass on to our children one day.

Former FDIC Head Joins Board of Online Lending Group

In a move that may prove to be quite surprising to some financial analysts and experts, Sheila Bair – formerly the head of the United States Federal Deposit Insurance Corp. – is taking on a new role. Bair is set to join on as a member of the board or an online lending group called Avant. All of this comes at the same time that the CFPB and others in the government are making serious efforts to regulate the world of online lending. Of course, with online loans quickly becoming more and more popular in recent years, it is somewhat easy to understand why certain government watchdog groups are interested in creating new, more stringent regulations. After all, that seems to be one of the only things our government consistently does.sheila-bair

Avant was founded by a former payday lender; one who made millions in this industry. And the company is growing rapidly. It just launched about three years ago and has already originated upwards of $3 billion in loans. Most of these loans were given to American consumers who did not exactly have spotless credit histories, either.

In a recent interview Bair said, “I really want there to be more innovation and competition serving this segment… it’s underserved.”

Online lending has been taking off like crazy in recent years. This industry is growing rapidly due to a number of startup companies that are working to make online lending a better experience for both individuals and small businesses. All of this growth, related to money as it has been, has certainly drawn the attention of financial regulators, like the Treasury Department and Consumer Financial Protection Bureau. Just recently, the U.S. Comptroller Thomas Curry stated that his group is on a mission to create a framework that will regulate what is often referred to as the “fintech” industry. This industry includes a wide range of services, like online loans and mobile payment processors.

As regulators and watchdog groups continue to scrutinize the industry, new lending company startups have been doing what they can to land former regulators and to bring them on board. Prosper Marketplace Inc. now includes Raj Date as a board member. Date was previously the deputy director of the Consumer Financial Protection Bureau (CFPB.) LendingClub Corp recently pulled in former Treasury Secretary Lawrence Summers.

Bair was the leader of the FDIC from 2006 until 2011. She often had clashes with leaders of the Treasury. These clashes were often related to how the government dealt with large banks during the last financial crisis. She fought hard for new rules that would make lenders add capital and to cut back on risky behavior. Some of the changes Bair championed wound up being included in the Dodd-Frank legislation and has led to stricter financial regulation in the United States.

Back in 2015 Bair became a board member for the largest lender in Spain, Banco Santander SA. She winded up parting ways with this lender after just a year and accepted a position as the president of Washington College, near Baltimore.

According to Avant CEO and co-founder Al Goldstein, “Sheila’s proven track record and expertise in the financial services and regulatory spaces will be invaluable to the Avant team.” Goldstein has stated that he would like Avant to ultimately turn into “the Amazon of financial services.” The company was valued by investors at about $2 billion when funds were raised for it back in 2015. The company puts a heavy focus on providing installment loans to consumers, with the average loan amount being about $8,000.

Can You Budget Smarter and Keep Finances under Control with a Prepaid Card

While nearly every financial “expert” out there seems to go on and on about the importance of sticking with a budget, and with nearly all of us agreeing this is important, we all have to admit that sometimes we fall short of sticking with our budgets. Even the most frugal people in the world have weaknesses, and may find themselves spending too much on eating out, pursuing hobbies or simply overspending sometimes. When these types of spending sprees get too out of control it can be difficult to reach your long term financial goals.6280507539_f32a72be10

If this all sounds like doom and gloom, remember that you are not alone. Millions of consumers all over the country have a hard time getting their spending habits under control. The traditional method of putting extra money aside and accounting for every penny spent and earned just does not work for everyone.

There is another way to keep your spending under control – prepaid cards! Reloadable debit cards can empower some folks with the money management skills that they need to keep their spending on the straight and narrow. Remember, prepaid cards are not like traditional debit cards, which are connected to your checking account, with all the funds in that account at their disposal.

A prepaid card begins with no balance and you control how much money goes in by “loading” the card with money that you will use to make purchases, pay for meals and to take care of any expenses you choose to tackle. Once the prepaid card reaches a zero balance, you can no longer make any purchases. These cards effectively work as a stop-gap against overspending, and allow you to set your own, personal limits on how much discretionary spending you do on a monthly basis. It is easy to figure out how much you usually spend and need as “walking around” money. You simply load the card up with that amount when you have the money, and you are all set.

When you use a credit card for this type of spending, it is easy to wind up over your head in debt. When you use your bank debit card, you could spend too much and wind up with expensive overdraft fees. And when you use cash, it is often tempting to spend too much and to keep hitting up the ATM for more. With a prepaid card, once your funds are gone, you are done spending.

Prepaid cards are not the ideal solution for everyone. But for people who can’t seem to stick with a self-imposed budget using other financial products, they may be the missing piece of a successful spending plan equation. These types of cards even offer online tools and apps that you can use to track your spending and to see how much you have in your account. Remember, though, that prepaid cards will not earn any interest on your money. Therefore, a prepaid card should not be used to replace a savings account that allows you to accrue interest on the money in your account. Other than for daily discretionary spending and maybe spending on a vacation, it is probably better to stick with other alternatives.

If you have tried and tried to get your daily/weekly/monthly spending under control, a loadable, prepaid debit card may prove to be a valuable tool that will help you to keep your finances on track. Consider trying one for a while. If it works for you – great! If it doesn’t work for you – it is easy enough to get the card to a zero balance and then to switch to another method of budgeting your cash.

Comcast Sends Paying Customers to Collections Agency

Comcast is one of the largest cable providers in the world. You’d think that a company like that would have their act together. However, it appears that they have made some serious slip-ups as of late; slip-ups that have a large portion of their customer base very upset. People who have been happy customers of the company for years have been forced to spend hours of their own valuable time to try to fix billing mistakes that the company has caused. It turns out that Comcast has taken additional money from some customers by way of automatic payment technology and they have even turned some of these paying customers over to collections agencies. These agencies have contacted these wronged consumers to demand payment – on bills that people didn’t even legitimately owe on.confused

According to one customer who was wrongly accused of not paying his bills, “I called Comcast a total of 10 times beginning 5/31/2014 and wasted at least 10 hours of my life trying to fix a problem that they created. In making those calls I was hung up on, transferred, and dismissively told to just wait it out.” Talk about being mistreated by a huge company: this guy not only got accused of not paying his bills, but he was subject to being dismissed by customer service employees who should have been more than happy to help him out.

The customer that we just told you about reported that the problem was supposed to have finally been fixed back in November of last year. However, he has had to continually call Comcast up to this very month and has still not had any satisfaction on the issue. This Comcast customer went on to say, “It blows me away that the burden is on me to fix their mistake and that it is taking so much of my resources. I really would like to bill them for my time.” He went on to explain that he is very concerned that these issues are going to lead to his credit score getting dinged in the very near future…

Journalists contacted Comcast after hearing about this situation. They were referred to the PR group for the company. A spokesperson for Comcast indicated that research was being done on the issue. After that statement, it was not too long before the company contacted the jilted customer to let him know that the issue had, indeed, been resolved.

It seems that this billing mistake took place when the person moved two times over the course of only three months. He had spent some time living with his parents, while he waited for closing on his new home to be complete. The error was supposed to have been caused by the cancellation of his existing account and the moving to a new home.

According to the Comcast customer, “Apparently they need to link your accounts when you move, and Comcast neglected to link my first location to the second and so continued to bill me for service I no longer had. They did, however, link my second to third location and so there was no problem with that move.”

This person realized that Comcast was still charging him for service at his previous address, and contacted them to get it fixed in late spring of 2014. He happens to have also stopped automatic payments to the company to stop them from taking even more of his cash. However, before he did this, the cable provider took an extra $176.77 from his bank account without telling him about it.

People need to pay close attention to the companies that they make payments to every month. Comcast may not have been charging this person extra on purpose, but they sure took their time in actually resolving the issue for him. Don’t let the big companies take advantage of you like this.

It is time to repeal regulations that harm the Unbanked

Financial inequality has become a hot topic in the media recently. It is high time that this important topic began to get more mainstream exposure. Not only are we seeing the perpetually wealthy become more and more financially prosperous, but we are also seeing more United States citizens and households becoming drastically under and un-served by the traditional financial institutions. According to data from an FDIC report published back in 2011, over 10 million households in this country were officially unbanked. This marked a one million American increase since 2009. Add to that the fact that another 20 percent of households in this country being classified as underbanked and it is easy to see that we have a real problem on our hands. Underbanked households are those that occasionally have to rely on alternative financial services, like payday lenders and cash checking facilities, in order to make ends advance online

Hard numbers are not exactly easy to come by, but the number of unbanked households have almost certainly increased since this data was originally posted. All of this has happened despite the fact that the economy has stabilized considerably and the economy has slowly continued to recover. So why is it that so many hard working American families continue to struggle financially? What has caused Americans to lose access to mainstream financial services in droves over the past 10 years or so?

The ongoing effects of the financial crisis certainly attributes to some of these financial woes. But there is also the steady consolidation going on in the banking industry that can be brought to task too. The majority of the blame, however, seems to belong to a provision of the Dodd-Frank law that many people are not aware of. This provision, called the “Durbin Amendment” laid down some hard and fast price controls on interchange fees (a part of the merchant’s discount fee that is paid for by retailers when you use a credit card at their store) that is charged for debit cards from large banks that have over $10 in financial assets.

The implementation of this mandate was supposed to set the price controls at rates that are “reasonable and proportional.” That has not always been the case, however. Appeals have been made that called the language of the amendment “confusing and its structure convoluted.” Another rule making by the Federal Reserve took effect in October of 2011. This changed the averaged interchange fee to fall from 44 cents per debit card transaction to about 24 cents, with average transaction amounts being for about $40.

How has the Durbin Amendment effected Americans? Over two years after it was implemented, studies have found that consumers are paying out more and getting less because of the Durbin Amendment. Low income consumers, it seems, have suffered more than others. To make matters worse, big box stores have seen billions of dollars in savings because of the lower interchange fees, but there is no hard evidence that any of these retailers have passed that savings on to their customers. And it appears that small, locally owned businesses have not benefited at all from this amendment.

Any time laws and regulations are pushed through, you can count on amendments being tacked on that may wind up causing more harm than good. The Durbin Amendment seems to be just such a piece of legal wrangling. If the government is really interested in helping lower income citizens, it is high time for these types of regulations to get repealed once and for all.

Millennials are Making Purchases on Their Own Terms

It seems like the media is onto somewhat of a negative trend when it comes to labeling millennials. They call them lazy, self-obsessed, entitled and ungrateful. In every generation you are going to find people with these negative traits. And even the best of us can be any combination of those descriptors at any given time. However most studies have debunked the whole concept of younger folks being nothing but a bunch of negative, lazy individuals. Could some of these negative personality traits be showing up in higher volume among millennials? That’s a possibility, but a subject best left for another outlet. It is important for lenders, especially auto loan lenders, to take note of some important aspects of people in this country who were born between 1980 and the mid-2000’s.7692630162_383fecbe32_m

To start with, millennials are a huge, always changing and progressive-thinking group of people. The millennials make up the largest, most educated and highly diverse generation in the United States as of right now. They account for a full third of the nation’s population and about 80 million of them are between the ages of 18 and 34. In one, short decade they will make up nearly 75 percent of the country’s workforce.

The second thing for lenders to take note of is that they will be purchasing cars and borrowing money to do this. It is just important to remember, though, that they will be looking to borrow according to their preferred terms and timeframes.

A recent study conducted by Deloitte found that nearly 61 percent of millennial consumers had plans to purchase or lease a new vehicle within the next 36 months. About 23 percent of them planned to purchase or lease a car within the next 12 months. In consideration of these new lending opportunities, let’s take a look at some interesting facts about the lending habits of millennials in the United States.

There is a much narrower generational gap between millennials and the previous generation – Gen X. In fact, studies indicate that the financial profiles of millennials is very close to what we see with members of Gen X.

Some say that millennials are not quite as stable as other generations. But when it comes to changing phone numbers, addresses, employers and even bank accounts, their numbers pretty much line up with Gen Xers. Of course, the work history of millennials is a bit shorter than other generations. This makes sense, as they are younger after all. That being said, they tend to earn a bit less per month – about $800 less – than their Gen X counterparts. With regards to loans, however, millennials are only borrowing about $120 less than the folks in the Gen X generation.

The most congruent pattern is revealed when it comes to purchasing cars. A study by J.D. Power that was conducted last year reveals that millennial purchases account for about 26 percent of new vehicle sales, while Gen X purchasers made up about 24 percent of purchasers. After all the numbers were crunched it looks like millennials are on a pace to increase their car buying by about 17 percent, once all of the numbers from 2014 are completely tallied.

It is time for lenders to see that selling cars to millennials is not all that much different than selling to other generations. If anything, this generation just seems willing to wait a bit longer to purchase their first new cars than previous generations were. Some tweaks may need to take place in the industry to match up with the purchasing patterns of millennials, but lenders can rest assured that this generation will be purchasing lots of new vehicles in the near future.