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Newsday analysis: LI consumer complaints outpace U.S. average

According to statistics from the new U.S. Consumer

According to statistics from the new U.S. Consumer Financial Protection Bureau, Long Islanders are not afraid to raise their hands to complain. Figures show residents of Nassau and Suffolk complain almost twice as often as the average American. Credit: iStock

Long Islanders have been complaining almost twice as often as the average American to the federal government's new Consumer Financial Protection Bureau, a Newsday analysis finds.

Long Islanders filed 1,460 complaints, or 5.2 per 10,000 people, from Dec. 1, 2011, to April 7, 2013, a rate 1.7 times higher than the national average. Nationally and on Long Island, more than half were about mortgages -- especially foreclosures, loan collection or loan modifications.

One reason for that high proportion of complaints might be the long, drawn-out foreclosure process mandated by New York State law, said Michael McHugh, chief executive of Continental Home Loans in Melville and chairman of the Empire State Mortgage Bankers Association, a trade group. In New York, foreclosures must be approved in court; not all states require court approval.

"In other parts of the country, it can take 12 months" to process a foreclosure, he said. "In metro New York, to hear four years is not unusual."

Homeowners in that long legal limbo are more likely to become restive and file complaints, he said, and more likely to seek -- and often be turned down for -- loan modifications to avert foreclosure.

Further, he said, Long Islanders tend to be better educated and more likely to know that the bureau even exists. "We have more astute borrowers -- it's a little more sophisticated market," he said.

Nationally and locally, credit cards were the subject that occasioned the second largest number of criticisms.

The breakdown of complaints by subject is somewhat skewed because the bureau began accepting complaints earlier about mortgages -- on Dec. 1, 2011. Complaints about bank accounts and student loans weren't accepted until three months later.

The bureau, which was legislated by Congress in 2010 in response to the financial and real estate meltdown, says it received a total of 93,787 consumer complaints from April 1, 2011, to April 7, 2012.

Its mission, besides taking consumer complaints, is to write and enforce federal consumer financial protection laws, promote financial education, research consumer behavior and monitor financial markets for new risks to consumers.

Companies about which complaints are made reported to the bureau that almost all had been settled, the bureau said.

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