Mortgage issues spur Philly consumers’ financial complaints

The No. 1 consumer problem in Philadelphia involves bad interactions between mortgage borrowers and banks.

That’s according to data from the Consumer Financial Protection Bureau, which found that more than a quarter of all complaints it has received in Philadelphia deal with disputes over property appraisers sent by a bank, struggles over settling on new loan terms, or other mortgage-related grief. 

Philadelphia’s rate of consumer complaints over mortgage issues mirrors the national average. That’s compared to Pennsylvania overall, where 22 percent of complaints are focused on mortgage disputes.

A statewide glimpse of those complaints can be found on the bureau’s website, where a database holding thousands of consumer complaints it receives are publicly accessible. The names of complainants and other identifying information is withheld.

Wells Fargo, which has the largest marketshare by deposits in Philadelphia, is the third-most-complained-about institution in the state, right behind Equifax and TransUnion. Most of those grievances are over mortgage issues.

“They were doing the modification based on an incorrect appraisal using the wrong square footage of my home,” stated one complaint from a Pennsylvania consumer sent to federal officials in October.

Another consumer wrote in September that she and her husband filed for bankruptcy after struggling to pay off personal debt. Afterward, they tried to change the terms of their mortgage loan but encountered some trouble seeing that through.

“During the time, we were continually stalled, delayed and denied a loan modification by Wells Fargo for our home because they said we did not qualify,” the consumer wrote.

Geoff Walsh, an attorney with National Consumer Law Center who studies the mortgage industry, said the bank departments dealing with consumers about mortgages are often understaffed and have a poor history of record keeping.

“The parts of the banks that are interacting with consumers in these complaints are the servicing division, the parts of the bank that make their money by servicing the loans, not necessarily owning them,” Walsh said.

He said, oftentimes, a borrower facing foreclosure will try to get loan terms adjusted, but will run up against a bank’s bad recordkeeping, especially with documents confirming a borrower’s income.

“By continuing to deny, or lose, these income information documents, they get to be old, and then borrowers have to start over again in the application process,” he said.

Many other complaints directed at Wells Fargo in the area deal with what some consumers see as excessive contact by the bank.

“I feel HARASSED by your policy of doing automatic calling when payment is past due but within the grace period,” one consumer wrote the bureau recently.

“Wells Fargo continuously calls my mother ‘s work number every day, leaving messages harassing her for payment,” wrote another Pennsylvania consumer.

A Wells Fargo representative did not return a request for comment. 

The complaint figures and narrative snapshots come from the Consumer Financial Protection Bureau, an agency created in the wake of the financial crises. Some Republican members of Congress are hoping President-elect Donald Trump’s  administration will downsize, defund or eliminate the agency, which is seen by big banks as an aggressive financial regulator.