It’s no secret that coronavirus has severely impacted our country’s economy. We had non-essential business shutdowns that lasted longer than we all hoped. Even when reopened, all businesses have been forced to operate differently—often with smaller staffs and fewer customers than before the pandemic. Workers have been laid off or furloughed. Many homeowners asked for—and were granted—forbearance on their mortgage payments. Small businesses have sought PPP loans with hopes of maximum loan forgiveness. I could go on, but you get the picture.

Consumer Credit 

Needless to say, all of these factors have put a serious strain on the consumer credit industry. For instance, mortgage rates are at historic lows. However, it’s not so easy to get a home loan or refinance right now because the demand is high and the regulations are much more stringent. Banks and lenders are stretched thin and doing whatever it takes to minimize risk with any loans or lines of credit they approve.

I recently read this article on CNBC that talks about how consumer grievances and complaints to the federal Consumer Financial Protection Bureau (CFPB) have skyrocketed these past few months. Consumers are concerned about their financial situations and don’t feel like they are getting the help they really need. The first stimulus check was nice (for those who got one), but $1,200 isn’t really going to go very far in the average American household. Another stimulus package may be on the way, but it may be too little and too late for a lot of people worried about their growing debts.

Consumer Complaints on the Rise

When comparing March through June of 2020 with the same months last year, complaints made to the CFPB were up 50% (according to a consumer advocacy group U.S. PIRG). Their definition of “complaints” includes credit report issues and other debt collection concerns related to mortgages, credit cards and other consumer debts.

The other looming worry is for those currently receiving unemployment benefits. The extra $600 a week of federal aid from the first stimulus package will be stopped at the end of July. It remains to be seen what the next stimulus bill might look like, so naturally a lot of people are concerned about what happens after these extra benefits run out.

“Consumers are complaining a lot about their treatment during the pandemic,” says Ed Mierzwinski of U.S. PIRG. “If you read the narratives in the database that are public, they tell of financial pain and frustration.”

Examining the Data

Credit reporting and credit repair services represent the largest complaint category, according to the U.S. PIRG study. Complaints related to these issues are up 86% compared to this same time period in 2019. The only category where complaints are actually down is student loans, largely because the Education Department froze required payments on federal student loans through September 30th.

The complaints they are reviewing are published publicly after a credit company responds to the grievance of the consumer (or after 15 days, whichever comes first).

“The CFPB doesn’t become your complaint attorney, but they require companies to respond to you, and they keep track of the response and whether it was timely,” Mierzwinski adds. “This means someone at the company in your complaint has to pay attention. I absolutely think you should file a complaint with the [bureau] if you’re getting the runaround from a bank or harassment from a company. Once you file the complaint with the CFPB, it gets the company’s attention.”

Only Time Will Tell

Nobody really knows what the rest of this crazy year has in store, but it’s clear there are struggles on both sides of the consumer credit issue. Only time will tell what the short-term and long-term effects of the coronavirus crisis will truly be.

If you have questions about your mortgage loan through Transparent Mortgage, please do not hesitate to call us at (619) 701-3906 or send your loan officer an email. We will do everything we can to get you the information and resources that you need.

Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.