Recent mortgage complaints and a report on mortgages to firsttime homebuying servicemembers VA lenders conference April 24 2019 Disclaimer This presentation is being made by Consumer Financial Protection Bureau representatives on behalf of the Bureau It does not constitute legal interpr ID: 771425
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Recent mortgage complaints and a report on mortgages to first-time homebuying servicemembers VA lenders conference | April 24, 2019
DisclaimerThis presentation is being made by Consumer Financial Protection Bureau representatives on behalf of the Bureau. It does not constitute legal interpretation, guidance or advice of the Bureau. Any opinions or views stated by the presenters are the presenters’ own and may not represent the Bureau’s views.This document was used in support of a live discussion. As such, it does not necessarily express the entirety of that discussion nor the relative emphasis of topics therein.
Bureau representativesTony Camilli, Lt Col, USAFRPolicy and Outreach SpecialistOffice of Servicemember AffairsPatrick Lapid, Ph.D. (USMCR Veteran) Economist Office of Research
Overview Background on the OSAHome buying education tools and resourcesRecent mortgage lending issues reported to the OSAReport on Mortgages to First-Time Homebuying Servicemembers and Veterans
Background on the OSA
OSA mission #1: Financial Education Order at: https://pueblo.gpo.gov/CFPBPubs/CFPBPubs.php
OSA mission #2: Monitor complaints
OSA mission #3: Improve consumer protection
Home buying education tools and resources
Buying a House consumerfinance.gov/owning-a-home
Worksheets, tips, and research starters to help people shop for a home loan Available in Spanish and English At consumerfinance.gov : More mortgage help Under Consumer Tools, click Mortgages Under Practitioner Resources, click Free Brochures Your Home Loan Toolkit
Money Topic Resource Portals – Mortgagesconsumerfinance.gov/consumer-tools/mortgages/
Ask CFPBconsumerfinance.gov/askcfpb
Recent mortgage lending issues reported to us
Complaints received by product**Apr 1, 2017 – Aug 31, 2018
Types of mortgage complaints and products from servicemembers, veterans and military families**Apr 1, 2017 – Aug 31, 2018
Types of mortgage complaints and products from servicemembers, veterans and military families**Apr 1, 2017 – Aug 31, 2018
What we’re hearing … Complaint #1: “I am at a complete and total loss. I need help. I am trying to serve my country, but it is difficult to concentrate on that when in the back of my head I know my family is in jeopardy of being homeless because of the unresponsive, unethical and illegal practices of _____________.” Complaint #2: “It was terrifying to live everyday with the possibility of being forced out of your home even you sought assistance and assistance was there but not for me, a veteran.” Complaint #3: “This has been our primary home since 2008 and were up to date with our mortgage company ________ up to hurricane Irma. We are a military family with girls under the age of 6. … I am filing this complaint because due to the lack of attention to our case this is affecting us and they have denied to reopen my case for the disaster modification.”
Mortgages to First-Time Homebuying Servicemembers
Report in brief How have first-time homebuying servicemembers’ (veterans and active duty) home loan choices evolved from 2006 to 2016? Comparisons across the following areas: Loan types (VA, conventional, FHA/USDA) Median loan amounts at origination Early delinquency rates: 60+ days within one year of origination 20
Data description and sample selection Consumer Credit Panel (CCP): 1-in-48 sample of de-identified consumer credit records Servicemember Civil Relief Act (SCRA) database match Performed by consumer reporting agency Sample for analysis: first-time home buyers, age 42 and younger, who took out a home loan between 2006-2016 Servicemember status from SCRA First-time home buyer: no prior home loan as of 2005 Q1 Age ≤ 42: SCRA data requires military service after September 1985; older servicemembers not identified in CCP/SCRA match 21
Home loan shares to first-time homebuyers (1) Time period (2) First-time homebuyer share of all new home loans (3) Servicemember share of all first-time homebuyers (in column 2) (4) Active-duty share of all first-time homebuying servicemembers (in column 3) 2006-2007 16 7.3 N/A 2008-2011 (housing crisis) 13 7.3 37 2012-2016 14 7.5 32 All values expressed as percentage points Active-duty status only known from 2008 onward 22
Home loan shares: first-time homebuyers, servicemembers vs. non-servicemembers 23
Home loans to servicemembers: by credit category24
Median loan amounts: by loan type and servicemember status 25
Early delinquency rates: by servicemember status, credit category, and loan type 26
VA early delinquency rates: by active duty status and credit score 27
SummaryVA loans among servicemembers doubled in market share from 2007 to 2009; rose to almost 80% by 2016Conventional loan share among servicemembers declined in responseSimilar increase in market share across servicemembers with nonprime and prime credit scoresEarly delinquency rates for VA loans for nonprime borrowers: Lower rates compared to other loan types up to 2009 After 2009, lower than FHA/USDA, higher than conv. loans Active-duty borrowers have lower delinquency rates compared to veterans 28
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