What Is The CFPB Up To?

STRATMOR Group, a consulting firm that helps mortgage banks build profitable mortgage lending operations, responded today to news that the Consumer Financial Protection Bureau would move forward with its plans to allow consumers to describe their banking experiences more fully on the agency’s complaint portal. STRATMOR, after surveying over 24,000 borrowers in 2014 — with 64% leaving at least one comment — said the move could be profoundly negative for lenders that are not prepared.

“Our experience surveying tens of thousands of mortgage borrowers tells us that when consumers are not happy, they tell people about it,” said Garth Graham, Managing Director of STRATMOR’s MortgageSAT program. “Lenders do not want these borrowers placing long, angry narratives into the public complaint database. If CFPB moves forward with this, the best defense will be for lenders to reach out to these consumers quickly, solving their problems where possible before they complain publicly.”

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STRATMOR Group research indicates that borrowers who leave the experience with low satisfaction provide three times as much commentary than those that are satisfied. On the positive side, the majority of borrowers who are proactively contacted after leaving negative feedback on MortgageSAT leave the experience with significantly higher levels of customer satisfaction. Here is some of what STRATMOR has learned so far:

>> 64% of borrowers will comment on customer satisfaction if asked

>> 83% of borrowers surveyed by MortgageSAT rated their customer satisfaction as high (either 9 or 10 on a 10 point scale)

>> Only 8% rated their customer satisfaction 6 or below out of 10

>> 80% of those rating customer service 6 or below will post a negative comment

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There is little doubt that if the CFPB makes it possible for dissatisfied borrowers to tell their stories in public they will do so. Graham continues, “We see that when lenders reach out directly to consumers right after closing to provide feedback, the consumers will provide it. We think it’s better to have that approach than to wait until an unhappy consumer tells the story to CFPB.”

In response to negative industry feedback regarding its plans to publicize consumer complaint narratives, the CFPB did say it would attempt to find a way to highlight customers’ positive experiences, but did not specify a timeframe for delivering such functionality. Fortunately, MortgageSAT offers lenders that capability today.

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