There were a total of 361 consumer complaints submitted to the Consumer Financial Protection Bureau (CFPB) related to the reverse mortgage industry during the calendar year 2023, according to a consumer complaint database maintained by the Bureau.
Of those complaints, 167 had to do with “trouble during the payment process,” while other topics included payment issues (80), closing issues (63) and application problems (49).
Breaking down 2023 complaint data
The total complaint figure is down from 425 recorded reverse mortgage complaints in 2022 and 386 in 2021, but is higher than the 2020 figure of 247. These are customer-submitted complaints and only indicate that dissatisfaction of some kind has taken place.
The overwhelming majority of the 2023 complaints saw complainants receive a timely response from the company (355) and were closed with an explanation (353). Sixty of the complaints received responses from the companies to both the consumer and the CFPB that the company elected not to share publicly.
Unsurprisingly, the highest concentration of reverse mortgage complaints came from California, the state that has long been at the top of origination rankings in the industry. There were 56 complaints from California, followed by Florida (49), New York (25), Maryland (21) and Texas (19).
Among the companies receiving the most complaints, 114 were sent by customers of Ocwen Financial Corp., the parent company of Liberty Reverse Mortgage/PHH. A total of 55 complaints were sent to Peer Advisors, LLC, which in 2013 acquired reverse mortgage servicing company Celink. Finance of America Companies (FOA) received 26 complaints, while American Advisors Group (AAG) — which was acquired by FOA last year — received 17 complaints.
Most other top 10 lenders recorded 10 complaints or fewer, including Longbridge Financial, Mutual of Omaha Mortgage and Fairway Independent Mortgage Corp.
Reverse Mortgage Investment Trust (RMIT), the parent company of Reverse Mortgage Funding (RMF), recorded five complaints in 2023 despite filing for bankruptcy at the end of 2022.
Compared to broader mortgage complaints, the reverse mortgage industry comprised less than 2% of the total 22,753 mortgage complaints the CFPB received in 2023.
Recent trends
In mid-2023, the CFPB released a report detailing its receipt of a higher average share of monthly reverse mortgage complaints between 2020 and 2022 when compared to prior years. At the time, the Bureau said this could be attributed to changes on the servicing side of the reverse mortgage business.
“In their complaints about reverse mortgages, consumers often express frustration in either getting statements or a payoff amount from their lender, or state that they are having difficulties making a payment or paying off a mortgage,” the Bureau said in its 2023 report. “In their responses, companies will sometimes apologize for the delay and provide the requested information. In other responses, companies will request follow up information from consumers.”
One encouraging attribute of reverse mortgage complaints to the CFPB is that they often close with explanations, according to Dan Hultquist, author of the educational book Understanding Reverse.
“The one thing unique about the reverse data is that nearly every one of them was closed with an explanation,” he said last summer. “That’s typical of our industry because we often deal with heirs who don’t understand what the product is or how it’s used. That’s the first thing I picked up on because I’m in the education world. It’s very important for people to understand, so I find this encouraging that [so many] of them were closed with an explanation.”
So far in 2024, the reverse mortgage industry has been the subject of 14 complaints received by the CFPB as of Jan. 26, compared to 719 total mortgage complaints in the same period.
