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Separate and Unequal-DS News Aug. 2015

DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.

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20 CFPB REQUESTS COMMENTS ON ENHANCED CONSUMER COMPLAINT DATABASE e Consumer Financial Protection Bureau (CFPB) issued a request for information regarding its consumer complaint database after going live with an enhanced version of the database in late June, according to the CFPB. e CFPB's new enhanced public-facing consumer complaint database, which went live on June 25, included more than 7,700 accounts of complaints consumers have against financial companies with regards to the way their mortgages, accounts, credit cards, debt collection, and other services are handled. e Bureau published the request for information to determine whether there are ways to help the public more easily understand the information presented in the database and how to compare the information the database contains. "In an effort to continue dialogue on easier ways to compare complaint handling performance, the Bureau requests specific suggestions from market participants, consumers, and other stakeholders on data normalization and its proper implementation within the database," the CFPB said in its request for information. e Bureau reported as of June 1, 2015, it has handled more than 627,000 complaints from the time it opened its doors in July 2011. According to the CFPB, about 28 percent of those complaints have been mortgage-related, making this the category with the largest share (debt collection was second with 25 percent). e Bureau said it forwards the complaints to companies and works to get a response, typically within 15 days. e CFPB launched its Consumer Complaint Database in June 2012. At that time, the database included basic individual-level information about the complaints, such as the date the complaint was submitted, the issue, the company being complained about, the type of product, and how the company handled the complaint. e consumer who submitted the complaint remained anonymous, though his or her ZIP code was included. e Bureau finalized a policy in March 2015 allowing consumers to publicly share their narratives when submitting complaints to the database. More than half of the complaints received have been shared publicly since the CFPB finalized the policy. e publishing of consumer narratives from the complaint database has been highly controversial; financial companies, including many mortgage servicers and banks, expressed concern that the Bureau was publishing one-sided, unverified information that may be damaging to companies' reputations. "e purpose of this request for information is to solicit and collect input from the public on how data are presented in the database," the CFPB said in the request for information. "e Bureau is requesting feedback on best practices for 'normalizing' the raw complaint data it makes available via the database so they are easier for the public to use and understand. To normalize data is to transform 'raw' data so that they may be compared in meaningful ways. is transformation increases the interoperability of 'raw' data—that is, the extent to which different users can share and make use of the data because they have a common understanding of its meaning." In order to provide more context and insight to the complaints received, e Five Star Institute and Black Knight Financial Services released a report titled, "Analysis and Study of CFPB Consumer Complaint Data Related to Mortgage Servicing Activities" in April. In the report, Black Knight and Five Star compared the Bureau's two predominant mortgage complaint categories—servicing and default—with loan trends, and also included publicly available data from both the CFPB and mortgage servicers as reported from the CFPB database. Editor's note: e Five Star Institute is the parent company of DS News and DSnews.com. FANNIE MAE'S GROSS MORTGAGE PORTFOLIO DIPS BELOW $4 BILLION Fannie Mae's gross mortgage portfolio experienced its second consecutive month of double-digit contraction as its value fell below $4 billion, according to Fannie Mae's May 2015 Monthly Volume Summary released at the end of June. In May, the GSE's gross mortgage port- folio shrank at a compound annualized rate of 25.9 percent, from $405.1 billion down to $395.1 billion. It was the first time since before the conservatorship began in September 2008 that the value of the gross mortgage portfolio dipped below $4 billion. In April, the portfolio contracted at an annualized rate of 17.4 percent after March's expansion of 7.8 percent. March's expansion was a rare occurrence for Fannie Mae's gross mortgage portfolio; the portfolio has expanded only three times in the last 59 months dating back to June 2010. e gross mortgage portfolio's value for May ($395.1 billion) is less than half of what it was in June 2010 ($818 billion). e portfolio's value declined by more than $16 billion since March 2015 when it totaled $411.7 billion. Fannie Mae's Book of Business also declined in May, decreasing at a compound annualized rate of 2.6 percent for the month. e value of the Book of Business was $3.110 trillion following the May contraction. e Book of Business, which includes the gross mortgage portfolio plus the total Fannie Mae mortgage- backed securities and other guarantees less the mortgage-backed securities in the portfolio, has contracted in four of the first five months of this year and has decreased at an average compound annualized rate of 1.1 percent this year. e total value of Fannie Mae's mortgage- backed securities and other guarantees for May was $2.8099 trillion, a slight decline from April's level of $2.8105 trillion. e end balance of mortgage-backed securities in the portfolio as of the end of May was $94.990 billion, down from $98.693 billion in April. e single-family serious delinquency rate for Fannie Mae in May fell another three basis points down to 1.70 percent, its lowest point since before the recession. Fannie Mae's single- family serious delinquency rate declined every quarter since Q1 2010. Also according to May's Monthly Volume Summary, Fannie Mae completed 8,597 loan modifications in May, a decline from the 9,297 loan mods completed in April. Fannie Mae completed 44,558 loan mods for the first five months of 2015, an average of 8,911 per month. For the full year of 2014, Fannie Mae completed 122,823 loan mods, a monthly average of 10,235.

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