Amid high mortgage rates and persistent inflation, beleaguered homeowners are seeing simple accounting errors go unfixed, leaving them to fight for their homes with little help from the CFPB.

After Tonya Golden’s mother passed away in 2021, she and her brother inherited their mom’s 1,500-square-foot house in Sweet Home, Oregon, a small town of 10,000 people in the western part of the state. Golden, then in her mid-forties, hired an attorney to settle the estate inheritance and keep the home as the family’s only real asset, according to a lawsuit she filed against her mortgage servicer earlier this year. 

But she also faced a medical crisis at home: Her husband had a brain aneurysm, which left him with severe cognitive damage and unable to work. As a full-time caregiver for her spouse and brother, who has muscular dystrophy, she fell behind on the mortgage. Golden found hope in early March 2025—the state of Oregon’s Homeowner Assistance Fund gave her $60,000 to pay her delinquent debt. Around the same time, Golden’s New Jersey-based mortgage servicer, PHH, had modified her loan to give her more time to make payments. She followed PHH’s instructions and made timely payments under the new loan terms for April, May and June 2025. 

Incredibly, by late May 2025, PHH had failed to apply the $60,000 payment it had received months earlier to Golden’s account and reinstate her loan. It set up a foreclosure sale of the house on May 30, 2025, which was halted just two days before the sale date, only after Golden got a restraining order from the state. According to the most recent court filing in Golden’s lawsuit against PHH, the servicer has yet to fix its accounting errors or remove its default-related costs and its own legal fees from her loan balance. A spokesperson for PHH declined to comment on the lawsuit’s allegations.

Golden’s ordeal is just one example of growing problems in mortgage servicing, the debt-collection business of taking in loan payments from borrowers and delivering the money to the banks and lenders that own the loans. Most mortgage servicers don’t own the loans they service. They earn fees based on the size of their servicing book, and they’re not on the hook for the principal debt if it goes bad. 

Onity, the $1.1 billion (revenue) West Palm Beach-based parent company of PHH, is a top ten non-bank mortgage servicer with over one million customers and a $340 billion servicing portfolio. According to data from the Consumer Financial Protection Bureau, Onity received 1,208 consumer complaints about mortgages in the first nine months of 2026, up 51% from the same period in 2025. The entire mortgage industry saw a similar, 49% rise in complaints, but Onity has a higher concentration of troubled loans than its peers. Nearly five out of every ten of its mortgage complaints were from people struggling to pay their mortgage, compared with three out of ten for its major competitors. And the company has a lengthy record of regulatory enforcement actions.

“Onity has undergone significant transformation over the years, including meaningful enhancements to our operations, technology and systems, and customer service capabilities,” said Dico Akseraylian, a senior vice president of communications at Onity, in a statement. He added that Onity partners with nonprofit housing counseling agencies, engages directly with consumers struggling to pay their mortgage, has helped “approximately 1.6 million U.S. homeowners avoid foreclosure” and has “forgiven more than $19 billion in mortgage debt.” 

Economic pressures and policy changes are contributing to the surge in complaints. Active foreclosures have risen to 296,000, their highest level in seven years, according to Intercontinental Exchange data, driven by persistent inflation and a stagnant job market. Mortgage interest rates recently hit 7.4%, a three-year high, and are hovering near multi-decade highs, making refinancing much more difficult. And policy changes over the past 18 months have made it harder for distressed borrowers to get assistance with mortgages backed by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA). 

During a period of increasing fragility for low- and middle-income consumers, the Trump administration has gutted the Consumer Financial Protection Bureau (CFPB) and dramatically diminished its effectiveness. Congress created the CFPB in 2010 to prevent predatory financial behavior. The Trump administration’s rollback has extended beyond enforcement to the behind-the-scenes supervisory exams the CFPB has long relied on to catch problems before they get out of control. 

Prior to 2025, the CFPB did about 150 supervisory examinations of financial institutions each year, with dozens of those typically targeting mortgage servicers, according to a former CFPB employee. During at least the first eight months of Trump’s second term as president, the CFPB did zero supervisory examinations, likely the first complete pause of exams since the agency’s creation. In 2026, it reportedly restarted examinations and scheduled 70 for the year, though there’s no evidence it’s doing any on mortgage servicers. CFPB representatives didn’t respond to our requests for comment. 

Currently, non-bank financial institutions, which played a key role in causing the financial crisis of 2008 and dominate the business of servicing some $15 trillion in residential mortgages, are largely unregulated. More than half of U.S. mortgage servicing is done by non-banks like Onity, Rocket Mortgage and Pennymac today, up from 7% fifteen years ago. 

Independent housing counselors who work with borrowers say the threat of a CFPB complaint used to motivate servicer reps to spring into action. “The attitude really flip-flopped once they knew no one was watching,” says Thomas Griffin, a counselor at Southern California housing agency USA Homeownership Foundation. Increasingly, servicers aren’t complying with the notice-of-error process overseen by the CFPB, says Marc Dann, Ohio’s former attorney general, who runs a plaintiffs’ law firm that often sues mortgage companies. The CFPB’s notice-of-error rules allow borrowers to flag mortgage-servicing mistakes in writing and require servicers to respond within 30 days.

“Without the examinations, without the risk of big cases by the CFPB, then all the servicers have to worry about is occasionally paying off one of our clients, which is probably cheaper than complying,” Dann says. 

And there’s no consumer-driven market force to correct the burgeoning problems, since borrowers can’t choose their servicer—lenders do. That creates an incentive for lenders to hire the cheapest servicer, says Hope Del Carlo, an Oregon attorney who has represented borrowers for 26 years.

Originally created under the name Ocwen in 1988, Onity was founded by William Erbey, a Harvard MBA and former GE Capital and GE Mortgage Insurance executive. At Ocwen, Erbey was known for penny-pinching, 75-hour workweeks and keeping the blinds closed in his Saint Croix office to avoid being distracted by the view of the Caribbean Sea. 

After the financial crisis, Erbey acquired four other servicers and assembled a large subprime mortgage-servicing business that became a Wall Street darling, reaching a market value of $8 billion and making Erbey a billionaire. But Ocwen crashed hard into a wall of regulatory problems. In 2013, the CFPB, 49 states and the District of Columbia accused Erbey’s company and two other servicers Ocwen had acquired of misapplying payments, charging unauthorized fees and failing to honor loan modifications. Without admitting wrongdoing, Ocwen agreed to provide $2 billion in principal reductions and $125 million to foreclosed-on borrowers. New York regulators later forced Erbey to resign and required Ocwen to pay a $100 million civil penalty, plus another $50 million to borrowers who had faced foreclosure. 

In a 2017 regulatory settlement with 10 states, Ocwen agreed to stop using its home-grown RealServicing software, which was riddled with errors and had been called “an absolute train wreck” by the company’s own head of servicing in an internal email, according to a separate CFPB lawsuit. (A judge ultimately dismissed the CFPB’s 2017 lawsuit in 2023, ruling that the claims were barred by the earlier 2013 settlement.) In 2018, Ocwen bought smaller New Jersey-based servicer PHH and hired its former CEO, Glen Messina, to run the merged business. 

Since then, the troubled company has muddled along, with wavering profitability and a market value bouncing around $200 to $300 million over the past five years. In June 2024 and March 2026, Ocwen and PHH each rebranded to Onity, and recently, Onity has been touting its use of AI and automation to improve its efficiency. In its second-quarter earnings call in August, Messina, who earned $7.6 million in 2025, said Onity’s AI initiatives have “transformed document management and customer engagement.” 

Lawsuits against Onity and other mortgage servicers describe persistent failures at some of the business’s most basic tasks: keeping accurate accounts and responding to borrowers’ complaints. One case filed this past spring alleges that South Carolina-based Shellpoint Mortgage Servicing, which is owned by New York financial firm Rithm Capital and services nearly $270 billion in mortgages, failed for months to answer a Maryland borrower’s written questions about his mortgage, violating state law. Then Shellpoint falsely told Maryland regulators it had already sent him response letters.

In April, Washington state’s Department of Financial Institutions announced it was seeking a $4.2 million fine against Newrez, which does business as Shellpoint, for ignoring borrower notices of error and misapplying payments, among other violations. According to CFPB data, in the first nine months of 2026, Shellpoint provided timely responses to only 80.2% of the 2,836 mortgage complaints it received, down from a 99.7% timely response rate in the first nine months of 2025. 

A Shellpoint spokesperson declined to comment on the Maryland lawsuit, which is still ongoing, and said the company is committed to complying with state and federal laws and is working with Washington state “toward a mutually agreeable conclusion.” Shellpoint and Texas-based servicer Rushmore, which services $55 billion in mortgages and is now owned by Rocket Companies, specialize in handling troubled mortgages—a business known as special servicing. 

In a case filed last year, a North Carolina couple said that after their mortgage was transferred to Rushmore, the company miscalculated their interest charges using daily simple interest, as if the loan were a home equity line of credit (HELOC). The mistake resulted in $53,000 in interest charges, and the company refused to adjust their balance despite saying it had no record of a HELOC in the couple’s name. 

When their mortgage was transferred to Anaheim, California-based Carrington Mortgage Services in 2025 ($200 billion in mortgages), the new servicer failed to audit and correct the accounting history, according to the lawsuit, and sent them a demand for $210,000 in overdue payments and fees. The case is now on the court’s 2027 trial calendar. A Rocket spokesperson didn’t respond to our requests for comment. In a legal filing, Carrington denied wrongdoing. 

Cory Mayer, a 46-year-old carpenter based in Santa Cruz County, alleges that Onity subsidiary PHH hasn’t fixed major accounting bungles in his account for over 10 years. Over that time, the company has tried to foreclose on him twice, though one foreclosure was rescinded after negotiations, and the second attempt was blocked by court injunctions.

Earlier this year, Onity took the rare step of forgiving Mayer’s entire mortgage debt of $628,000, including more than $400,000 in remaining principal, evidently to compensate him for his unbearable hassle. Mayer is still pursuing a lawsuit against Onity for breach of contract and other violations, given the havoc it has wrought on his life. 

Mortgage servicers’ archaic tech systems are a major cause of the problems, says Andrew Wang, the cofounder and CEO of Valon, a seven-year-old New York fintech that develops mortgage-servicing software. Servicers’ reps have dozens of different systems they need to work with, and the disjoined programs often don’t talk to each other or reconcile payments in real time. 

Minor missteps by a servicer rep within this brittle system can cause a cascade of errors. Servicers’ ledger systems often only accommodate a certain number of balances per borrower, which can lead to misapplied payments when the money needs to be allocated across different purposes like taxes and insurance, Wang says. And with servicers’ thin profit margins and lack of abundant cash to invest and resolve these problems, they go unfixed. 

Attorneys and housing counselors say servicers are understaffed to manage defaults, and reps lack the proper training to navigate the intricate waterfall process required to handle borrowers in delinquency. “You have people who are not terribly well paid doing complex financial transactions,” says Marc Dann. “Re-underwriting loans, which is essentially what a loan modification requires, is a complicated process.” 

Housing counselors on the front lines say there’s increasing urgency to improve mortgage servicers’ operations. Venita Jones, a counselor based in Fort Worth, Texas, now gets about ten calls a week from borrowers in distress, up from one or two per week a couple of years ago. 

As foreclosures rise, servicers could help by hiring more reps and relying less on automated voice agents or chatbots, especially for borrowers in delinquency. They could also directly connect borrowers with the country’s 4,000 HUD-certified housing counselors, says Son Nguyen, founder of VAREP, a nonprofit that advises veterans on homeownership and personal finance. He has offered to train servicer staff on loss mitigation, organize borrower-servicer forums and set up a program for servicers to refer their borrowers to VAREP, an approach he says was effective during the financial crisis. Few have taken him up on it. Last month, the Trump administration proposed canceling $56 million in housing-counseling funding, but a federal judge kept the appropriation from expiring while a lawsuit is pending.

Two years ago, the CFPB proposed stripping away rigid regulatory rules for loss mitigation to help borrowers get assistance faster while boosting consumer protections. The agency aimed to finalize the rule in 2025, but under the Trump administration, its progress has stalled. It’s unclear where the effort stands today.

Darci Sells-Hoffman, a 60-year-old retired analyst from Sacramento, has seen the devastating effects of an inflexible approach. In 2025, she missed two $1,000 mortgage payments on her home and offered to catch up with $1,500 monthly payments. Onity told her she needed to formally apply for assistance instead, then rejected her four times, including once for insufficient income and another time after her daughter moved in and began paying rent. As representatives repeatedly told her to reapply, she fell further behind. 

In June 2026, Onity transferred her mortgage to Rithm Capital’s Newrez, which operates Shellpoint Mortgage Servicing and services nearly $880 billion in mortgages. Newrez recently denied her assistance, citing too much home equity. Now $19,000 behind and fearing a foreclosure sale, she’s working with a lawyer to seek bankruptcy protection and save the home she’s lived in since 2001. Representatives from Onity and Newrez declined to comment.

There are few people left to fill the regulatory gap left by the CFPB, says Dann. Some states have stepped up enforcement of mortgage servicers, but their efforts have been less visible than in other areas of financial services, and they’re not equipped to fill the CFPB’s shoes. That places the burden on a shrinking group of private attorneys—a troubling reality since mortgages are one of the most complicated areas of consumer-protection law. If oversight remains weak and defaults keep rising, servicing failures threaten to turn missed payments into a much larger foreclosure problem.