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Mortgage closing can be complicated: Navid’s story

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Imagine you’re about to close on a home. You’ve spent months calculating costs, comparing home prices, researching neighborhoods, and you’ve finally found a house you love and can afford. But after making a deposit, you find out that your loan is not approved and the lender is keeping your money.

That’s what happened to Navid and his wife.

“All of these things were new to us,” Navid said. In a very short period of time, we lost $12,000.”

Navid tried to contact the lender but was getting nowhere. With no help in sight, he assumed his money was lost forever until he found out about the CFPB.

“One night we were watching the Daily Show with Jon Stewart and the director of the Consumer Financial Protection Bureau was the guest,” Navid remembered. “He talked about this organization and what they do.”

After the show, he decided to submit a complaint and soon after, the couple received a full refund and a formal apology from the mortgage company.

“I came to [the] United States because I thought this is a country [where] there are rules and regulations, and the government is for the people. This is why I chose this country,” Navid said. He added that it’s a wonderful feeling to know that there are parts of the government that are trying to reach out and help people.

We know that buying a home can be complicated, and that’s why we’ve created tools to help home buyers understand and shop for mortgages. We’re glad that Navid and his wife got the help they needed, and we’re here for you, too! To share your experience or learn more from others, visit us at consumerfinance.gov/yourstory.

Today we begin to share the story of your complaints

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Every day, we hear directly from the American public about your experiences in the consumer financial marketplace. We hear from consumers in their own words about the pain of having a home in foreclosure, the frustration of trying to correct an inaccurate credit report, or their helplessness in dealing with an abusive debt collector.

Today, for the first time, we are making consumers’ complaint narratives – the heart and soul of the complaints we receive – public. These narratives are important because they tell the story of what happened in the consumers’ own words. Making these consumer narratives public, amplifies the voice of the consumer.

Every complaint gives us insight

Since June 2012, we’ve shared individual-level complaint data on our website, to educate the public and improve the functioning of the marketplace: a first by any financial regulator at the state or federal level.

Each complaint we receive, which is now more than 627,000 since we opened in July 2011, provides us with invaluable data. Consumer complaint data is part of the Bureau’s DNA and all complaints play an important role in our supervision of companies, enforcement actions, rulemakings, and our engagement with servicemembers, students, the economically vulnerable, and older Americans.

But how we use complaint data is only half of the story.

Every complaint gives you insight, too

Making your experience public gives more people, including you, the power to improve the financial marketplace. In our Consumer Complaint Database, you can access reliable data on how many and what kinds of complaints companies receive from us and how different companies handle those complaints. Our database is also searchable so you can find and read about experiences consumers are having with companies as you make decisions about financial products and services for yourself and your family.

Consumers want to be heard

Publishing complaint narratives represents a milestone for consumer empowerment. Consumers now have the choice to share in their own words their experiences with the consumer financial marketplace.

Consumers are in control and based upon what we have observed since consumers began opting-in, giving us their consent to publish their narratives (after we’ve removed personal information), they are thoughtfully exercising this right and want to be heard. Approximately 59 percent of consumers submitting complaints through our website have told us they want to share their experiences with the public. Consumers aren’t just skipping the checkbox. We believe consumers are taking the time to read, understand, and make informed decisions when deciding to provide, or withhold, their consent.

After four and a half years of hard work, I am proud that the Consumer Complaint Database is now a reality. It reflects the commitment of our amazing team of dedicated public servants to empower consumers to make better decisions for themselves and their families. And now that it’s in your hands, it will help the financial marketplace run more fairly for all Americans.

Visit the Consumer Complaint Database to read about consumers’ experiences, and if you’re facing a problem with a financial service or product you can submit a complaint and add your voice to the database.

Ally settlement administrator will contact eligible borrowers soon

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In December 2013, together with the Department of Justice (DOJ), we ordered Ally Financial Inc. and Ally Bank to pay $80 million in damages to consumers harmed by Ally’s auto loan pricing policies that resulted in discrimination. We found that Ally had a policy of giving dealers the discretion to increase or “mark up” consumers’ interest rates, and paying dealers for those markups. We found that between April 2011 and December 2013, Ally’s markup policy resulted in African-American, Hispanic, Asian and Pacific Islander borrowers paying more for auto loans than similarly situated non-Hispanic white borrowers. Ally agreed to a settlement and is paying a settlement administrator to distribute the $80 million in damages to harmed borrowers. Ally will also refund affected borrowers who it overcharged after December 2013, and Ally has already started paying some of those borrowers.

For Ally auto loans obtained between April 2011 and December 2013, the Ally Settlement Administrator will locate and send checks to affected borrowers who were overcharged. Over the next weeks, the Administrator will mail packages to identified borrowers with instructions for how to participate in the settlement. Borrowers who are African American, Hispanic, Asian, or Pacific Islander and who obtained an auto loan from Ally between April 1, 2011 and December 31, 2013 may be eligible for a payment from the Administrator. If you think you are eligible, you should look for a package explaining the specific minimum amount of money that you may be eligible to receive. Your actual payment amount may be greater, depending on how many borrowers participate in the settlement.

How to respond if you receive a package

The packages will tell you what you must do to receive your payment. To get your payment, you should follow those instructions, including returning any required forms. You can return any forms by postage pre-paid mail, fax, or through the Administrator’s website. Just follow the instructions on the form. Be sure to submit any required forms by October 24, 2015. Only those eligible consumers who return required forms by October 24, 2015, will receive their payment.

What to do if you think you are eligible but do not receive a package

If you don’t receive a package in the mail by July 15, 2015, but you think you should receive a payment, you can call the Ally Settlement Administrator to ask about your eligibility. You can also fill out a claim eligibility form and submit it to the administrator by mail, fax, or through the administrator’s website.

Participating in the settlement is free

Watch out for scammers claiming that they will help you for a fee or asking for your personal information in order to get your check. When large numbers of consumers receive settlement money, scammers sometimes pop up. The scammer may charge you a fee or try to steal your personal information. While you are of course free to speak with an attorney, you do not need to hire a lawyer or pay anyone a fee in order to participate in this settlement.

As part of this settlement, the Ally Settlement Administrator, the CFPB, the DOJ, or your local U.S. Attorney’s office may contact you. Ally is paying Heffler Claims Group to serve as the Administrator. You should treat any other contact claiming to be related to this settlement as a scam. Please immediately report any scam to the Administrator at info@autofinancesettlement.com.

Still have questions?

If you have any questions, check out the Ally Settlement Administrator’s website or call the Administrator, starting on June 26, 2015, at 1 (844)-271-4780.

Learn more about how you can protect yourself from credit discrimination.

Un administrador del acuerdo de Ally en breve estará en contacto con prestatarios elegibles

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En diciembre de 2013, junto con el Departamento de Justicia (DOJ), ordenamos a Ally Financial Inc. y Ally Bank a pagar $80 millones en daños y perjuicios a los consumidores perjudicados por las políticas de precios de préstamos para vehículo de Ally que dieron lugar a discriminación. Descubrimos que Ally tenía una política de dar a los concesionarios la discreción para aumentar o “elevar los márgenes” de las tasas de interés de los consumidores y pagar a los concesionarios esos márgenes. Encontramos que, entre abril de 2011 y diciembre de 2013, la política de márgenes de Ally dio lugar a que los prestatarios afroamericanos, hispanos, asiáticos e isleños del Pacífico pagaran más por los préstamos para vehículo que los prestatarios blancos no hispanos en situación similar. Ally llegó a un acuerdo y contrató a un administrador de acuerdos para distribuir los $80 millones en daños a los prestatarios perjudicados. Ally también reembolsará a los prestatarios afectados a quienes cobró sobreprecios después de diciembre de 2013, y Ally ya ha comenzado a pagar a algunos de esos prestatarios.

Para préstamos de vehículo de Ally obtenidos entre abril de 2011 y diciembre de 2013, el Administrador del Acuerdo de Ally localizará a los prestatarios afectados que tuvieron sobreprecios y les enviará cheques. Durante las próximas semanas, el administrador enviará por correo paquetes informativos a los prestatarios identificados con instrucciones sobre cómo participar en el acuerdo. Los prestatarios afroamericanos, hispanos, asiáticos o de las islas del Pacífico que obtuvieron un préstamo para vehículo de Ally entre el 1 de abril de 2011 y el 31 de diciembre 2013 pueden ser elegibles para un pago del administrador. Si piensa que usted es elegible, manténgase en alerta para un paquete informativo que explica la cantidad mínima específica de dinero que usted puede ser elegible para recibir. El monto de su pago efectivo puede ser mayor, según el número de prestatarios participando en el acuerdo.

Cómo responder si recibe un paquete

Los paquetes le dirán lo que debe hacer para recibir su pago. Para recibir su pago, debe seguir esas instrucciones, incluido devolver los formularios requeridos. Puede devolver los formularios por correo con porte prepagado, por fax o a través del sitio web del administrador. Simplemente siga las instrucciones del formulario. No olvide enviar los formularios antes del 24 de octubre 2015. Sólo consumidores elegibles que devuelven formularios requeridos antes del 24 de octubre 2015 recibirán sus pagos.

Qué debe hacer si cree que es elegible pero no recibe un paquete

Si no recibe un paquete por correo antes del 15 de julio 2015, pero cree que debería recibir un pago, llame al Administrador del Acuerdo de Ally para preguntar por su elegibilidad. También puede llenar un formulario de elegibilidad para reclamación y enviarlo al administrador por correo, por fax o a través del sitio web del administrador.

La participación en el acuerdo es gratuita

Tenga cuidado con los estafadores que dicen que le ayudarán por una comisión o que le piden información personal con el fin de que pueda recibir su cheque. Cuando un gran número de consumidores recibe dinero de acuerdos es cuando a veces aparecen los estafadores. El estafador le puede pedir dinero o tratar de robar su información personal. Si bien usted está en total libertad de hablar con un abogado, no necesita contratar a un abogado ni pagarle a nadie para poder participar en este acuerdo.

Como parte de este acuerdo, el Administrador del Acuerdo de Ally, el CFPB, el DOJ o la oficina del Fiscal de EE. UU. local pueden ponerse en contacto con usted. Ally ha contratado a Heffler Claims Group para servir de Administrador. Debe tratar como estafa a cualquier otro intento de contacto que afirme estar relacionado con este acuerdo. Por favor, traiga a la atención inmediata del administrador cualquier estafa enviando un email a info@autofinancesettlement.com.

¿Tiene más preguntas?

Si tiene preguntas, consulte el sitio web del Administrador del Acuerdo de Ally o empezando el 26 de junio de 2015, puede llamar al Administrador, al 1 (844) 271-4780.

Obtenga más información sobre cómo puede protegerse de la discriminación crediticia.

Sound off on student loan servicing

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http://files.consumerfinance.gov/f/201505_cfpb-student-debt-stress-header
A few weeks ago, we announced that we’re gathering information about student loan servicers — the companies responsible for collecting and processing student loan payments. Although student loans are usually thought of as a younger American issue, in reality there are an increasing number of older Americans paying back student loan debt. Many older consumers struggle with student loan debt, sometimes forcing them to delay retirement or threatening their financial security when in retirement.

Older consumers may hold student loan debt because they are still paying off loans that were:

  • accrued when they were much younger
  • acquired during the course of a mid- or late-career switch, or
  • taken out for the education of their children or grandchildren.

According to a recent Government Accountability Office report, here are some concerning trends about older consumers and student loan debt:

  • Between 2005 and 2013, outstanding federal student loan debt owed by older borrowers grew from less than $3 billion to more than $18 billion, more than a six-fold increase.
  • Delinquency rates for older borrowers doubled between 2005 and 2012, rising from 6 to 12.5 percent.
  • Older borrowers defaulted on federal loans at much higher rates than other borrowers. More than a quarter of federal loans owed by borrowers ages 65-74 are in default. For borrowers 75 years or older, more than half of outstanding federal loans are in default.
  • The number of older consumers whose social security benefits were offset for the collection of federal student loan debt increased nearly 400 percent from 2002 through 2013. For consumers 65 or older the increase was roughly 500 percent.

Many older consumers who have submitted complaints to the Bureau about student loans report being billed for loans they never borrowed, receiving harassing and abusive debt collection calls, being wrongly charged fees because of the servicer’s accounting errors, and having their credit rating impacted by incorrect reporting of student loan information.

We now want to hear from you. If you’ve had problems with student loan debt or run into repayment roadblocks, share your story. Here are just a few things you can tell us about:

  • Disclosure, accessibility, and availability of options to release a co-signer from their legal obligation to repay a co-signed student loan
  • Disclosure, accessibility, and availability of options to discharge or reduce student loan debt in the event of the death or disability of a borrower or co-signer
  • Processing, allocation, and application of loan payments
  • The imposition and disclosure of late fees
  • The complaint resolution process (including how allegations of fraud are resolved)
  • Furnishing of credit information to credit reporting agencies

To share your story for the public record, go to regulations.gov or click this link to send us an email. Please don’t include sensitive information like account numbers and social security numbers. Submit your input and ideas by July 13, 2015. Having trouble with a link in this blog post? You can also submit an official comment online.

If you experience any problem with a student loan, you can submit a complaint online or call us at (855) 411-2372. We’ll forward your complaint to the company and work to get a response from them.

Consumer advisory: Don’t be misled by reverse mortgage advertising

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Reverse Mortgage Ads photo

You might see enticing images of youthful retirees on the golf course or enjoying other leisure activities in a reverse mortgage advertisement. A reverse mortgage is a special type of loan that allows homeowners 62 and older to borrow against the accrued equity in their homes. The loan must be paid back when the borrower dies, moves, or no longer lives in the home.

Ads for reverse mortgages are found on television, radio, in print, and on the internet, and many ads feature celebrity spokespeople discussing the benefits of reverse mortgages without mentioning risks. We looked closely at many ads and found incomplete and inaccurate statements used to describe the loans. In addition, most of the important loan requirements were often buried in fine print if they were even mentioned at all. These advertisements may leave older homeowners with the false impression that reverse mortgage loans are a risk-free solution to financial gaps in retirement.

In conducting our study, we met with older homeowners in Washington DC, Chicago, and Los Angeles to learn about their thoughts and impressions of reverse mortgage ads. After looking at a variety of ads, many homeowners we spoke to didn’t realize reverse mortgage loans need to be repaid. Instead, some thought they could access their equity interest-free, or that the federal government provided the money as a benefit to seniors. Homeowners told us that the most attractive messages in the ads were “you can live in your home as long as you want,” and that you “still own your home.” Many ads, however, didn’t mention that seniors could lose their homes if they don’t satisfy the loan requirements, such as paying property taxes or homeowners insurance.

Seniors said the ads made reverse mortgages look like a good way to travel and enjoy retirement while they were still young and active. Yet Americans are living longer, more active lives than ever before. Reverse mortgage borrowers can outlive their loan funds by borrowing without careful planning.

Reverse mortgage ads don’t always tell the whole story, so consider these facts when you see advertisements:

1. A reverse mortgage is a home loan, not a government benefit

Reverse mortgages have fees and compounding interest that must be repaid, just like other home loans. With most reverse mortgages, federal insurance guarantees that borrowers will receive their loan funds if their lender has financial difficulty or if their loan balance exceeds the value of their home. However, borrowers pay for this insurance and it’s not a government benefit.

2. You can lose your home with a reverse mortgage

When a reverse mortgage ad says you’ll retain ownership of your home, or that you can live there as long as you want to, don’t take these messages at face value. These statements are true only if you continue to meet all requirements of the reverse mortgage. If you fall behind on your property taxes or homeowners insurance, are absent from your home for longer than six months, or fail to satisfy other requirements, you can trigger a loan default. If you don’t take care of the default in time, the lender can foreclose on your home. Sometimes these requirements are listed in fine print, but not always. If you have a question about reverse mortgage requirements, contact a HUD-approved housing counselor near you.

3. Without a good plan, you could outlive your loan money

After seeing a reverse mortgage ad, you might think that a reverse mortgage guarantees your financial security no matter how long you live. Americans are living longer today than they were just a generation ago. Make sure you have a financial plan in place that accounts for a long life. That way if you need to tap your home equity, you won’t do it too early and risk running out of retirement resources later in life.

If you have a problem with your reverse mortgage

Check out Ask CFPB to learn more about reverse mortgages. You can also download a printer-friendly version of this information to share with friends or clients.

If you’re having a problem with your reverse mortgage or having problems getting through to your mortgage servicer, you can submit a complaint to us online or by calling (855) 411-2372 or TTY/TDD (855) 729- 2372. We’ll forward your complaint to the company and work to get you a response within 15 days.

For more information about how reverse mortgages work and questions to ask, read our guide to reverse mortgages for older consumers and their families. Do you or a loved one have a reverse mortgage loan? Here are three steps you should take.

The CFPB blog aims to facilitate conversations about our work. We want your comments to drive this conversation. Please be courteous, constructive, and on-topic. To help make the conversation productive, we encourage you to read our comment policy before posting. Comments on any post remain open for seven days from the date it was posted.