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22 SPOTLIGHT: CFPB A LOOK AT THE LATEST NEWS AFFECTING THE BUREAU CONFUSION OVER LOAN TERMS, FORECLOSURE ON NON-BORROWING SPOUSES TOP LIST OF COMPLAINTS TO CFPB A recent report from the Consumer Finance Protection Bureau (CFPB), which takes a look at consumer complaints in the reverse mortgage arena over a three-year period, identified seven main complaints about the process. Most of the complaints boil down to consumer confusion over the terms of a loan. e most common complaint is that borrowers are unable to refinance. Related, many consumers dislike that they cannot change the terms of the loan. e most frequent complaint concerning requested loan changes "involves consumers wishing to add additional borrowers to the loan in order to extend the term of the loan," the report stated. "Reverse mortgages prohibit loan assumptions since actuarial tables are used when a reverse mortgage is issued to determine how much to lend to the borrower." Perhaps the most serious complaint comes from surviving, non-borrowing spouses. When the borrower spouse dies, surviving spouses suddenly face foreclosure, despite the fact that "some consumers report that their loan originator falsely assured them they would be able to add the other spouse to the loan at a later date," the report stated. Similarly, others complained the loans are often difficult to repay and lenders often throw obstacles in the way when consumers take steps to avoid foreclosure. It should not be construed, however, that complaints run rampant in the reverse mortgage world. From December 2011 through December 2014, the CFPB received 1,200 complaints regarding reverse mortgages. In 2012, the CFPB stated in its Report to Congress that there are an average 70,000 reverse mortgage loans written every year. Reverse mortgages make up about 1 percent of all mortgages, and complaints about reverse mortgages make up about 1 percent of all mortgage complaints. e types of complaints the CFPB reported, however, are not news to the industry itself. Matt Neumeier, president of Premier Reverse Mortgage in Atlanta, said the industry has long heard the woes of non-borrowing spouses and complaints about the inability to add to or alter loan terms. And while Neumeier said the report is a good snapshot of the consumer mind, he found the fact that it does not identify exactly who the complainants are to be a major shortcoming. "My question is, how many complaints stemmed from adult children of a borrower after the parents passed away?" Neumeier said. Usually, borrowers themselves are happy with the loan process, and complaints typically come from adult children who were not part of the lending process to begin with—and were excluded specifically by borrowers wanting to keep their children out of the process, he said. One bright spot for non-borrowing spouses, however, include the changes the Department of Housing and Urban Development implemented to give non-borrowing spouses greater leeway to defer loan payments after the borrowing spouse's death. Mortgagees can start complying with new non-borrowing spouse requirements for case numbers assigned as of Jan. 12, and full compliance is mandatory as of March 9. BIPARTISAN LEGISLATION INTRODUCED TO CREATE INDEPENDENT INSPECTOR GENERAL FOR CFPB One of the major complaints of the Con- sumer Financial Protection Bureau's (CFPB) critics is a lack of Congressional oversight for the Bureau. Lawmakers re-introduced a bipartisan bill in the U.S. House of Representatives in an attempt to change that. U.S. Rep. Steve Stivers (R-Ohio), along with Rep. Tim Walz (D-Minnesota) re-introduced the Bureau of Consumer Financial Protection- Inspector General Act of 2015, a bill that would create an independent inspector general for the CFPB. "Government accountability is important now, more than ever," Stivers said. "is legisla- tion will allow for increased oversight of an agency that has been given broad authority. It is important that we take the necessary steps to ensure the CFPB is accountable to the American people." e CFPB was created in 2011 as part of the Dodd-Frank Wall Street Reform Act with a mission to "make markets for consumer financial products and services work for Americans— whether they are applying for a mortgage, choos- ing among credit cards, or using any number of other consumer financial products," according to the Bureau's website. e Bureau's actions in carrying out this mission have resulted in several multimillion dollar fines and penalties against financial institutions, notably a $2 billion action levied against nonbank mortgage servicer Oc- wen Financial in 2013 for servicing violations. "e CFPB is an important agency that works to ensure that you, the consumer, are pro- tected from things like predatory payday lenders, shoddy mortgage bankers, and defective prod- ucts. eir work is important, but that doesn't mean that they don't need oversight," Walz said. "I fully support their cause, to stand up for you and believe the appointment of an independent inspector general will only increase their ability to fulfill their important mission." e CFPB's critics, such as Rep. Jeb Hensar- ling (R-Texas), have questioned why the Bureau is not accountable to Congress despite being funded by the Federal Reserve, and also why the Bureau is led by a single director when other government agencies such as the FDIC, the Fed- eral Reserve, and the SEC are all led by boards. Currently, the CFPB shares an inspector general with the Fed, and that position is ap- pointed by the Fed chair and not subject to U.S. Senate approval. e bill introduced by Stivers and Walz will create the position of independent inspector general for the CFPB that is appointed by the president and confirmed by the Senate. More than 30 federal government agencies or departments have an independent inspector general, according to Stivers' website. A spokesperson from the CFPB declined to comment on the bill. Stivers originally introduced the bill in the House in December 2013, but it gained little to no ground since then. e CFPB's backers, primarily Democrats, have stated they are vehe- mently opposed to any type of CFPB reform and have vowed to protect the Bureau from any type of legislation that would make changes to the organization.

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