New federal hotline available for mortgage complaints

A new source of federal help is now available for borrower’s to submit formal complaints regarding their interests in banking, home loans and other forms of consumer credit.

The complaint hotline launched on Dec. 1 and so far has handled 5,074 complaints, according to the Consumer Financial Protection Bureau.

When a borrower submits a formal complaint to the bureau, the information is sent to the lender or mortgage servicer named in the complaint using a secure web portal.

The lender then reviews the information and determines what action needs to take place to solve the issue. The lender is required to report any action to the bureau which sends it on to the borrower for review.

According to the CFPB, borrowers can log onto the agency’s secure consumer portal or call their toll-free number to receive updates, provide additional information and review responses from their lender.

A familiar complaint may be in the form of the consumer’s bank not responding to a complaint that their escrow account is incorrect and monthly payments are too high or if a home loan servicer refuses to modify the consumer’s monthly payments if they receive an unexpected change in income.

The complaint hotline is accessible online at the CFPB’s website, by toll-free phone as well as by regular mail and fax.

The agency was created in part due to last year’s Dodd-Frank financial reform. It is supposed to look out for consumer interests in banking, financial products and home loans.

The bureau is expected to report on the initial months’ results sometime in early 2012. If consumers have a legitimate complaint, they are encouraged to utilize the hotline.