PropertyProf Blog

SUMMER READING: Land, Money, and Mortgages

For all the real estate finance nerds out there (me!), there's a great new book out from Palgrave called Land and Credit: Mortgages in the Medieval and Early Modern European Countryside, edited by Chris Briggs & Jaco Zuiderduijn. It's a really interesting historical read that I highly recommend. Take a look at this chapter and abstract, posted to SSRN by its author David Waddilove (Harvard Project on the Foundation of Private Law), titled Why the Equity of Redemption?:

The ‘equity of redemption’ is an equitable doctrine undergirding the law of secured lending in the common-law world. It holds that despite any legal forms to the contrary, a borrower remains the true owner of pledged/mortgaged property, with a right to redeem such property upon payment of principal, interests, and costs at any time until a court of equity forecloses a borrower’s interest. This doctrine originated in the English Court of Chancery in the early-modern period, and coincided with a significant expansion in the use of mortgages.

This chapter explores why the equity of redemption arose. It does so by situating the doctrine in the social context of its origin in early modern England. It shows that several traditional explanations for the doctrine, such as the Chancery offering programmatic support for the landed classes, or seeking to capture jurisdiction and increased business and fees from the common-law courts, or intentionally providing a counterweight to the weak bargaining power of mortgagors, are likely misunderstandings. Instead, primary sources suggest that the doctrine is best understood as judicial enforcement of social norms related to mortgage debts in preference to legal technicalities; the equity of redemption was enforcement of “real-world” expectations over legal rights. Why the equity of redemption arose is therefore because it was the most obviously “fair” or intuitively “reasonable” way to address mortgage forfeiture at the time. The equity of redemption was the layman’s response to mortgage forfeiture rather than the lawyer’s.

Tanya Marsh Lanches The Podcast We've All Been Waiting For: DEATH ET. SEQ.

The one and only Tanya Marsh (Wake Forest) has launched a much-anticipated podcast on the law of all things death-related. 

The title of the podcast is Death, et seq.  The current plan is to have stand alone episodes that examine a particular issue, as well as interviews with interesting people involved in death care. You can visit the website at www.deathetseq.com for links to the episodes, ways to subscribe on iTunes, Stitcher, and Google Play, and for show notes.

As you may know, Tanya teaches a class at the Wake Forest School of Law each semester called "Funeral and Cemetery Law." She begins the podcast the same way she begins each class--by discussing a series of real life cases.  Her 17 year old son Liam Sherman plays the role of the student in the podcast, sharing his initial impressions (he does a superb job!).  You can find the episode here.

 

Episode 3 is an interview with Dan Isard, who is a management and financial consultant to the funeral industry. Dan has been advising funeral homes for 25 years, so Tanya talked to him in order to lay the foundation of what the industry is, the challenges it faces, and where it's headed.  You can find the episode here.

 

Episode 4 is an interview with Caitlin Doughty, a friend of Tanya's who is a licensed funeral director in California. Caitlin is also the NY Times best selling author of two books, and she is the founder of the Death Positive Movement.  You can find the episode here.

 

Podcast episodes will be posted on a weekly basis. Go download one and listen in today! Great work, Tanya!

Kochan on Pride and Property

Donald Kochan (Chapman) has posted Pride & Property: An Interdisciplinary Analysis of Their Symbiotic Relationship (USC Interdisciplinary Law Journal) on SSRN. Here's the abstract:

Pride and property are mutually reinforcing, symbiotic forces through which individuals express their identity in a biologically, economically, and psychologically driven manner that generates evolutionary advantages. This Article is the first to examine the correlative components of pride and property ownership, along with the legal implications that follow from their symbiotic relationship. It is an interdisciplinary treatment of pride and property—engaging law, economics, psychology, evolutionary biology, evolutionary psychology, and philosophy. The grossly under-studied “authentic,” achievement-oriented, and motivational variety of pride (as contrasted with the much-vilified “hubristic” kind) is recently heralded as perhaps the most important human emotion for evolutionary purposes. The Article explains that authentic pride is adaptive, functional, and manifests itself in evolutionarily beneficial ways—including through its interaction with property. The Article also outlines the mechanics of a pride based-utility function.

Property has acquisitional and expressive functions, allowing ownership to be both the repository of pride-based utility and also useful as a vehicle through which evolutionarily-beneficial authentic pride can be expressed. Property can act as a “pride display” that signals status-deservedness to the greater community, enhancing the prospects of group acceptance critical to evolutionary fitness. Although literature has discussed property as integrated with one’s self-identity and personhood, and while recent research on pride has recognized its fundamental relationship to the self, very little analysis ties those strands together to analyze pride in propertyas identity development and to evaluate the motivational role pride plays in the acquisition, maintenance, and improvement of property. This Article seeks to fill that void. It explores ways we might maximize the influence of the utility-enhancing aspects of the pride emotion and examines how we can find new appreciation for the role that identity and our emotions play in how we experience, manage, govern, and protect property.

Data as Property at the Supreme Court (UPDATED)

Yesterday, SCOTUS decided the much anticipated case of South Dakota v. Wayfair et al. Although this is primarily viewed as a state tax/constituitonal law dispute, it actually has some significant property law aspects to it. The fight was over the ability of South Dakota (and really, any state) to impose an obligation on out-of-state companies to collect and remit sales taxes on sales that are conducted with in-state consumers but when (and here's the kicker) the out-of-state company has no "physical presence" in the taxing state. The issue is actually quite significant. By some estimates, states lose somewhere between $8 and $33 billion per year in uncollected sales taxes from online transactions. It's actually not a matter of states not being able to tax these transactions. Indeed, they most certainly have the authority to tax online sales--or at least to collect use taxes from buyers who do not otherwise pay sales tax when they make an online purchase. The problem is forcing out of state companies to collect and remit the sales tax (recognizing that most people are noncompliant in paying their use taxes).

The obstacle for states has been two SCOTUS decisions - National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967) and Quill Corp. v. North Dakota, 504 U. S. 298 (1992). In those cases (particularly Quill), the Supreme Court held that a state cannot impose an obligation on out of state companies to collect and remit sales taxes for transactions with residents of the state if the company lacks a physical presence in that jurisdiction. What this means is that even a very large company (think Overstock.com, Amazon, etc.) that does substantial business in a given state, but has no physical location or employees in that state, does not have to collect sales taxes for transactions with in-state residents. On the other hand, a small business with one employee and thin margins must collect and remit the sales taxes for those same transactions. Many have decried the market distortion that Quill and Bellas Hess have created--essentially a tax shelter for certain online retailers.

But yesterday SCOTUS overruled the physical presence rule of these older cases (much to the delight of states, including my own which is currently facing a major budget shortfall due to a lack of revenue). The case is worth reading for a number of reasons--particularly the dissent by Chief Justice Roberts, joined by Justices Breyer, Kagan, and Sotomayor (an interesting read about administrability, stare decis, and the proper role of the courts v. Congress). However, what I think you'll be interested in reading is the following passage from Justice Kennedy's majority opinion:

Modern e-commerce does not align analytically with a test that relies on the sort of physical presence defined in Quill. In a footnote, Quill rejected the argument that “title to ‘a few floppy diskettes’ present in a State” was sufficient to constitute a “substantial nexus,” id., at 315, n. 8. But it is not clear why a single employee or a single warehouse should create a substantial nexus while “physi­cal” aspects of pervasive modern technology should not. For example, a company with a website accessible in South Dakota may be said to have a physical presence in the State via the customers’ computers. A website may leave cookies saved to the customers’ hard drives, or cus­ tomers may download the company’s app onto their phones. Or a company may lease data storage that is per­ manently, or even occasionally, located in South Dakota. 

I think it's noteworthy that while the Court rejected the physicality test, it still hems to the physicality notion of property. Data, to be sure, is intangible--it has no physical body. Yet, the Court seems determined (albeit indirectly) to apply some level of physicality to data--or at least to adopt proxies for physicality. Why is this so? I'll be thinking about this more over the coming months, but I surmise it's because so much of our law uses property as a base. We say something is property, and thus is owned by someone, and then we use that concept as a socket to plug in lots of other areas of law (IP, secured finance, privacy, constitutional law, tax, etc.). But when we talk about data, we haven't completely made the leap to "data as property" quite yet. I think, however, we're trying to get there and this language in Wayfair is representative of our desire to do so. If data is property then it has to be owned by someone (or someones). That might mean that data cannot be as free-flowing as it seems to be now, which in turn might result in more limited or slower innovation, since making data property could drive up transaction costs. After all, if we say data is property then we might want to better formalize instances in which we give it away (see the Cambridge Analytica and Facebook scandal). We might also be less likely to want our law to respect sweeping licensing agreements that we click-through and give our data away even before it's created.

More to come! Feel free to share your thoughts in the comments below or shoot me an email. Have a great weekend!

UPDATE:

Friends, I spoke too soon! Just yesterday the Court decided Carpenter v. United States. Again, this case doesn't have much to do with property law (at least not facially). It was about whether there was an unlawful search under the Fourth Amendment when the government obtained cell phone location records from a mobile phone company and, in doing so, arrested multiple individuals for several robberies. On the one hand, one could argue that the actual records themselves (the data) were the property of the cell phone companies. Indeed, the customer agreements with the consumers provided that the company could collect cell phone location data generated from cell sites near where a person makes a call, sends an email, fires off a text message etc. But, such a view of the data as being the property of the company and not the property of the customer was not shared by the majority. Instead, the majority opinion held that this was still a search (and although they didn't say this, what is implied is that this is the case despite whatever the customer agreement might have said). Take a read:

The Government’s position [that this is not a search] fails to contend with the seismic shifts in digital technology that made possible the tracking of not only Carpenter’s location but also everyone else’s, not for a short period but for years and years. Sprint Corporation and its competitors are not your typical witnesses. Unlike the nosy neighbor who keeps an eye on comings and goings, they are ever alert, and their memory is nearly infallible. There is a world of difference between the limited types of personal information addressed in Smith and Miller and the exhaustive chronicle of location information casually collected by wireless carriers today. . .

Cell phone location information is not truly “shared” as one normally understands the term. In the first place, cell phones and the services they provide are “such a pervasive and insistent part of daily life” that carrying one is indispensable to participation in modern society.

As a result, in no meaningful sense does the user voluntarily “assume[] the risk” of turning over a comprehensive dossier of his physical movements.

The majority is basically saying that even though the agreement between the cell phone provider and the customer says that the information collected about user location belongs to the provider, this doesn't necessarily mean that the customer has no privacy interest in that information. Because this kind of data is so pervasive and so insistent in everyday life, we can't just treat it as someone else's property for Fourth Amendment purposes.

Now, Justice Kennedy (in his dissent) didn't like this at all because he said the Court was wrongly moving away from the property-based approach to the Fourth Amendment. He stated that the defendants could "'assert neither ownership nor possession' of the records because the records were created, owned, and controlled by the companies. . . The businesses were not bailees or custodians of the records, with a duty to hold the records for the defendants’ use." He argues quite simply that “This case should be resolved by interpreting accepted property principles as the baseline for reasonable expectations of privacy."

Justices Alito and Thomas generally agree with this so-called more property-based approach. Thomas wrote:

By obtaining the cell-site records of MetroPCS and Sprint, the Government did not search Carpenter’s property. He did not create the records, he does not maintain them, he cannot control them, and he cannot destroy them. Neither the terms of his contracts nor any provision of law makes the records his. The records belong to MetroPCS and Sprint.

Alito follows up in stating that:

By allowing Carpenter to object to the search of a third party’s property, the Court threatens to revolutionize a second and independent line of Fourth Amendment doctrine.  . . . The Fourth Amendment does not confer rights with respect to the persons, houses, papers, and effects of others.  . . the cell-site records obtained by the Government belong to Carpenter’s cell service providers, not to Carpenter.

So the basic divide between the majority and these three dissents is that if you take a traditional property approach then there was no search and if you move away from a property approach then there is a search. But the most fascinating part of the case, I think, is the final dissent by Justice Gorsuch. He says that in taking a property approach you could easily conclude that there was a search. How is this so? Take a read:

Just because you entrust your data—in some cases, your modern-day papers and effects—to a third party may not mean you lose any Fourth Amendment interest in its contents. . .

I doubt that complete ownership or exclusive control of property is always a necessary condition to the assertion of a Fourth Amendment right. Where houses are concerned, for example, individuals can enjoy Fourth Amendment protection without fee simple title. Both the text of the Amendment and the common law rule support that conclusion. . . .use of technology is functionally compelled by the demands of modern life, and in that way the fact that we store data with third parties may amount to a sort of involuntary bailment too.

And here's the best part:

It seems to me entirely possible a person’s cell-site data could qualify as his papers or effects under existing law. 

Plainly, customers have substantial legal interests in this information, including at least some right to include, exclude, and control its use. Those interests might even rise to the level of a property right.

So what is Justice Gorusch saying? I think what he means is that property law is not so monolithic as his colleagues suggest. In other words, it's not simply what's yours is yours and what's mine is mine. Property is a bundle of sticks! (you knew I had to throw that in, right?). We've never really considered property to be monolithic when dealing with traditional assets (i.e., tangibles) and so why do we have to do so with data (non-rivalrous intangibles)? True, he doesn't come up with a big theory of data as property, but he does suggest there's room to figure that out--you don't have to jettison property law in order to deal with data/digital information.

In this way, the thinking of the majority that people have an interest in data (regardless of contract law) and the thinking of Gorsuch (the notion of property law being contextualized and nuanced when it comes to data) are quite reconcilable. 

Comment away!

 

 

Trump's New Plan for Reorganizing the Government's Role in the Residential Mortgage Market

Today, the Trump administration released a report entitled Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations. The report is the result of executive order 13781 (titled “Comprehensive Plan for Reorganizing the Executive Branch"), which called for a study on how the executive branch is structured. This report provides the administration's recommendations for a structural realignment of various portions of the executive branch. The report notes that while some changes can be accomplished through executive order, a number of others must come from legislative action.

For the property law folks, I thought you might be interested in what the report says about the administration's plans for Fannie Mae and Freddie Mac, the giants of the secondary mortgage market, and the various mortgage insurance programs (like FHA, VA, etc). Here are some of the more salient portions of the document (underlining provided by me):

THE OPPORTUNITY

This proposal would reorganize the way the Federal Government delivers mortgage assistance and go beyond restructuring Federal agencies and programs by transitioning Fannie Mae and Freddie Mac to fully private entities. Competition to the duopolistic role played by the two privately-owned GSEs would be an essential element of reform to decrease moral hazard and risk to the taxpayer. Both Fannie Mae and Freddie Mac, as well as other competitive entrants, would have access to an explicit Federal guarantee for mortgage-backed securities (MBS) that they issue that is only exposed in limited, exigent circumstances. Such a guarantee would be on-budget and fully paid-for. This would also ensure that the Government’s role is more transparent and accountable to taxpayers, minimize the risk of taxpayer-funded bailouts, and ensure that mortgage credit continues to be available in times of market stress for creditworthy borrowers.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Under the current system, Fannie Mae and Freddie Mac, two privately-owned GSEs, buy and guarantee mortgages from lenders and sell them to investors as MBS. Although they are private companies, they are congressionally chartered, a unique status that has been viewed as conveying an implicit Federal backstop that has in turn lowered their cost of capital relative to similarly-sized institutions. . . In their Federal charters and by action of their primary regulator, the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac have goals of providing a certain amount of financing to low- and moderate-income borrowers. However, these affordable housing activities are not clearly accounted for on the Federal balance sheet.

In addition to the GSEs, other Federal programs provide mortgage support, contributing to a large Federal footprint in the housing market. The Department of Housing and Urban Development (HUD) Federal Housing Administration (FHA) provides mortgage insurance intended to aid borrowers traditionally underserved by the conventional mortgage market, including lower-wealth households, minorities, and first-time homebuyers. The Departments of Veterans Affairs (VA) and Agriculture (USDA) also administer mortgage insurance programs targeted to veterans and lower-income rural households, respectively. The loans guaranteed by FHA, VA, and USDA are in turn packaged into MBS that are guaranteed by Ginnie Mae, a Federal entity operated by HUD. Together, loans backed by the GSEs and Ginnie Mae comprised about 70 percent of mortgages originated in 2017.

. . . This reorganization proposal, which includes broad policy and legislative reforms beyond restructuring Federal agencies and programs, would:

• Increase competition. The proposal would remove the Federal charter from statute and fully privatize the GSEs. A Federal entity with secondary mortgage market experience would be charged with regulatory oversight of the fully privatized GSEs, have the authority to approve guarantors, and develop a regulatory environment that is conducive to developing competition amongst new private guarantors and the incumbent GSEs, ensuring they would all be adequately capitalized and competing on a level playing field. If the GSEs lost some of the benefits that have led them to dominate the market, this would enable other private companies to begin competing in this space. The regulator would also ensure fair access to the secondary market for all market participants, including community financial institutions and small lenders. 

• Increase transparency and accountability. Under this proposal, which would also involve entities outside the Executive Branch of the Federal Government, guarantors would have access to an explicit guarantee on the MBS that they issue that is only exposed in limited, exigent circumstances. Taxpayers would be protected by virtue of the capital requirements imposed on the guarantors, maintenance of responsible loan underwriting standards, and other protections deemed appropriate by their primary regulator. The regulator would set fees to create an insurance fund designed to take effect only after substantial losses are incurred by the private market, including the guarantors, in order to ensure the continued availability of mortgage financing through shifting economic cycles. The projected cost of this guarantee and other fees charged would be on-budget and accountable, resulting in reduced implicit taxpayer exposure.

   
• Align incentives and reduce overlap. Under this reform proposal, which would also require legislative and policy changes affecting the mandates of entities that are not part of the United States Government, the GSEs would focus on secondary market liquidity for mortgage loans to qualified borrowers, while HUD would assume primary responsibility for affordable housing objectives by providing support to low- and moderate-income families that cannot be fulfilled through traditional underwriting and other housing assistance grants and subsidies. To effectuate this, the newly fully-privatized GSEs would have mandates focused on defining the appropriate lending markets served in order to level the playing field with the private sector and avoid unnecessary cross-subsidization. A separate fee on the outstanding volume of the MBS issued by guarantors would be used specifically for affordable housing purposes, and would be transferred through congressional appropriations to, and administered by, HUD. 
  
  
• Provide more targeted assistance to those in need. The proposal would be designed so that the affordable housing fees transferred to HUD would enable FHA to provide more targeted subsidies to low- and moderate-income homebuyers while maintaining responsible and sustainable support for homeownership and wealth-building. Some of the fees could potentially be used to support affordable multifamily housing or other HUD activities. All of this support would be on-budget and accountable. 

Part of this is interesting because although Fannie and Freddie would be privatized, they would still be government regulated. Would this "federal entity with secondary mortgage market experience" be the FHFA (the current HUD-related conservator of Fannie and Freddie) or a new agency? It also appears that the goal would be to bring new guarantors (of MBSs) into the marketplace to compete with the GSEs. The report envisions more private entities issuing MBSs, all with some kind of "limited" government guarantee. The taxpayer is going to be protected, so argues the report, by making these guarantors adhere to capital requirements, among other regulations. Of course, the devil is in the details. Banks have capital requirements, but they were swept up into the subprime mortgage crisis. Indeed, they are still playing in the subprime mortgage loan business through their warehouse loan funding of shadow bank lenders like Exeter Finance and others. Does this plan really ensure that "taxpayers would be protected?" The report says that the regulator can impose other appropriate rules, but it's not clear that adding more firms to the secondary marketplace where they all enjoy some form of government guarantee is superior to the existing situation of having merely two. 

With respect to the realignment of incentives, it's not clear to me what "qualified borrowers" constitute in terms of how the adminstration views the role of the new and improved GSEs, versus HUD's "responsibility for affordable housing objectives by providing support to low- and moderate-income families." How will these things be different? In other words, what will animate the "qualifications" for GSE borrowers if not some kind of over-arching demographic target? Will it just be traditional credit-worthiness and risk-driven underwriting?

Lastly, with respect to the idea of providing more "targeted assistance to those in need," I would like to see more details on what those programs would look like. The report says that fees charged on GSE outstanding MBS volumes would be transferred to HUD and that the FHA could use these fees to help subsidize low- and moderate-income homebuyers. But, what does this mean? To help the FHA expand its insurance/guarantee program? Also, does multifamily housing mean an expansion of the existing HUD-backed programs or new programs? This last bullet point feels less development.

As David Reiss has noted on his blog, GSE reform has been brewing in Congress for awhile now (to no avail). We'll see where this goes as well. 

New Interactive Mortgage Map @UrbanInstitute

The Housing Finance Policy Center at the Urban Institute has once again created an incredibly cool tool for understanding the housing market - both where we've been and where we're going. Check out this interactive map showing the housing market's boom and bust over time with mortgage origination data from 2001 through 2017.

And here's a map of the US showing mortgage originations for just the year 2017.

Yuille on Dignity Takings, Nuisance Actions, and the National Gang Strategy

Lua K. Yuille (Kansas) has posted Dignity Takings in Gangland's Suburban Frontier (Chicago-Kent Law Review) on SSRN. Here's the abstract:

 

This paper engages the evolving dignity takings framework, first developed by Bernadette Atuahene, in the context of contemporary American street gangs (e.g. Crips, Bloods, Latin Kings, etc.). Contrary to most popular accounts, it starts with a re-imagined and complicated notion of street gangs that emphasizes not their secondary or tertiary violence and criminality but their primary function as corporate institutions engaged in the sustained, transgressive creation of alternative markets for the creation of the types of property interests that scholars have associated with the development and pursuit of identity and “person-hood.” From this perspective, the paper applies the dignity takings analysis to public nuisance abatement actions (commonly known as gang injunctions), which have become standard tools in the national gang strategy. These civil mechanisms enjoin the conduct and activities of the gangs, as unincorporated entities, and prohibit named individuals (including but not limited to known and suspected gang members) from engaging in a panoply of otherwise legal activities: displaying gang symbols, wearing clothing or colors associated with a gang, possessing tools or objects capable of defacing real or personal property (e.g. pens), appearing in public view with a known gang member. Through qualitative analyses of interviews, court documents, and political hearings, the paper identifies a special form of dehumanization and infantilization that it refers to as "adultization," which demonstrates that the dispossession of identity property associated with suburban gang injunctions depresses self-esteem, erodes self-confidence, damages identity and feelings of community worth, and dehumanizes enjoined individuals in a way that deprives them of their fundamental right of dignity, constituting a clear example of a dignity taking.

Owley and Phelps on Preservation Law and Civil War Monuments

Jessica Owley (Buffalo) and Jess R. Phelps (Dinse, Knapp, & McAndrew) have posted Understanding the Complicated Landscape of Civil War Monuments (Indiana Law Journal Supp.) on SSRN. Here's the abstract:

 

This essay examines the controversy regarding confederate monuments and attempts to contextualize this debate within the current preservation framework. While much attention has been paid to this topic over the past year, particularly with regard to “public” monuments, such discussion has generally failed to recognize the varied and complicated property law layers involved—which can fundamentally change the legal requirements for modification or removal. We propose a spectrum or framework for assessing these resources ranging from public to private, and we explore the messy space in-between these poles where most monuments actually fall. By highlighting these categories, we provide an initial introduction of a typology for evaluating confederate monuments, serving as a foundation for an exploration into the nature of property law and monument protection.

The CFPB's Complaint Database and Property Problems

Acting director of the Consumer Financial Protection Bureau (CFPB) Mick Mulvaney has been in the news quite a bit lately. He recently dismissed all 25 members of the agency’s Consumer Advisory Board (a stakeholder group required by the Dodd-Frank Act), and he has also been telling groups and members of Congress that he will likely close the CFPB’s consumer complaint database to the public:

"I don’t see anything in [the law] that says I have to run a Yelp for financial services sponsored by the federal government,” [Mulvaney] said at a banking industry conference in Washington. “I don’t see anything in here that says that I have to make all of those public."

This is truly unfortunate news. The database (which is scrubbed of consumer-identifying information) has been hugely helpful to academics (like me!), consumers, businesses, and policy makers. I recently joined a number of consumer finance law professors in providing comments to the CFPB on why, among other things, the public nature of the complaint database is important and should be maintained.

One of the reasons we argue that the database should remain public has to do with how it serves as a source (and sometimes the only source) of information for consumers in deciding whether to do business with certain firms. This is particularly true when a financial service business doesn't have an established operating history with lots of publicly available information. It's also useful for getting information about financial firms that lack a comprehensive regulator where consumer review and complaint information can be obtained or requested.

For us property folks, consider mortgage lending. Mortgage lending was long dominated by regulated financial institutions, such as banks, thrifts, and credit unions. But in today’s market, nonbank financial companies are the major players. The firm that originates the most mortgage loans in the United States is currently Quicken Loans—a Detroit-based, nonbank company that started making online mortgage loans around the late 1990s.

(Source: Home Mortgage Disclosure Act Data 2008-2017 using Lender ID 7197000003-7 and filtering for "all originated mortgages")

The CFPB’s database gives consumers a place to learn about how people are interacting with Quicken and other online firms that lack brick-and-mortar storefronts. The entries include not only the product type and the issue/problem that the consumer encountered, but also important information about whether the firm responded to the complaint and how it was ultimately resolved. The complaints are also broken down by location and date, thereby allowing a more nuanced analysis of the data for researchers. More information, one hopes, leads to consumers making better and more informed decisions about obtaining a home loan.

(Source: CFPB Complaint Database using Quicken Loans, Inc. and filtering for Product/Sub-product: Mortgages)

And lastly, many of the complaint entries include narratives. Individuals have the option of telling their story when they submit a complaint to the CFPB. These real life stories provide perhaps one of the only venues where the lived experiences behind the complaint numbers are revealed to the public. A few mortgage-related narratives aimed at Quicken Loans so far from 2018 include:

Consumer Complaint No. 2858565 (2018)
XX/XX/XXXX - I applied for a home mortgage with Quicken Loan website and a banker contacted me to ask for all confidential information ( income, debt, credit report, assets, etc ). XX/XX/XXXX - Quicken Loan requested my current credit report. XX/XX/XXXX - Quicken Loan contacted me via online email saying my debt to income ratio can not qualify for mortgage with them. I totally understand the reason and rejection. XX/XX/XXXX - Another Quicken Loan banker " XXXX XXXX '' blind called me that she can help me get the mortgage approved this time and ask me again a lot of information. As she walk through the term and rate and cost, she kept emphasizing the call is recorded and ask for my agreement to do business with Quicken Loan ; she requested {$500.00} deposit using credit card. I disagree with the urgency because I do not have rights to compare bank interest rate offer and terms with others at the moment. I simply ask her to provide me everything on record, such as email, paper mail, etc. She refused and pretend never heard. The worst part is she kept asking me for the agreement to do business with Quicken Loan and ask for credit card for deposit {$500.00}. I deeply concerned about my personal information may be misused by Quicken Loan. Please please investigate this company 's mortgage practice. I believe they are attempting to take advantage of home buyers who is in tight schedule to secure a mortgage for closing. Thank you. The call on XX/XX/XXXX is between XXXX - XXXX EST from number XXXX.

Consumer Complaint No. 2851684 (2018)
After Hurricane Irma left us with property damage I called Quicken Loans to place the mortgage in forbearance. They walked me through the process of how an adjustment would work and applied the forbearance. I've had monthly phone calls where they've checked in and they've asked me each time if it was my primary residence and if it was occupied and each time I've told them it is not my primary residence, but it does have a tenant who is renting from us. This month when the time came to adjust the mortgage they've told me that they can't adjust it because it's a second home so I now have a {$7000.00} balance due, or {$510.00} a month for 12 months ( they adjusted from 6 months to 12 ). I can not afford an extra {$510.00} a month, I don't have that money sitting in my checking account. Quicken 's response is just " sorry we made a mistake, you need to pay for it ''. I've done the right thing in trying to repay the loan on a property that is upside down when everyone else foreclosed or short selled, now my credit and life is ruined. They are engineered to " amaze '', but not in the way their marketing department wants them to be.

Consumer Complaint No. 2829194 (2018)
Around XX/XX/18 I applied for a fha mortgage through quicken loans. After uploading paystubs and a2 's and having a phone conversation with a XXXX XXXX i was given a pre approval. I was then asked to write a letter of explanation as to what happened to the house that it's listed in my bankruptcy case. It was explained that the house was foreclosed. At no point did anyone from quicken loans ask when it was foreclosed. After I found a house, signed a contract to purchased the house, paid {$300.00} for a inspection and gave quicken loans {$500.00} to be used for appraisal was i then told two days later on XX/XX/18 that I was denied because my foreclosure was not three years old. I was told no appraisal had been ordered so i would be getting my money refunded. On that same day XX/XX/XXXX a appraisal was done on the property. At this point I am out {$800.00} for a mortgage that I never should have been pre approved for. They knew I was applying for a fha mortgage, they knew I had a foreclosure and they knew the waiting period for a fha mortgage after foreclosure is three years, yet they didn't ask when the foreclosure took place.

Now of course, these data can tell many different stories. Sometimes the company (like Quicken) did nothing wrong. At other times, consumers have clearly gotten unfairly lost in the lender's corporate bureaucracy. And still at other times it's hard to tell where the break-down happened. It’s up to researchers, industry, advocates, and consumers to interpret the data so that they are useful and help us build a stronger way for Americans to access homeownership online.

But one thing is for sure—closing the complaint database to the public prevents these stories from ever being told. And that serves no one. As of today, the database is still available to the public. We'll see if Mr. Mulvaney follows-through on his threat.