U.S. Mortgage Index

What is arbitration and how does it affect my mortgage?

Short answer

Arbitration is a private way to resolve a dispute without going to court. The CFPB says some protections that usually exist in court, including a typical right to appeal, may not exist in arbitration. Mortgage lenders may not put mandatory arbitration clauses in mortgage agreements, and you cannot be required to accept mandatory arbitration.

Full explanation

In arbitration, a person called an arbitrator hears each side and decides the outcome. That process sits outside the court system. The CFPB notes that features commonly available in court — such as an appeal — may not be available there.

Older mortgage contracts sometimes contained mandatory arbitration clauses that steered certain disputes out of court. The CFPB says lenders are no longer allowed to include those mandatory clauses. You cannot be forced to accept mandatory arbitration. You may still agree to use arbitration for a particular dispute if you prefer that path.

This explanation does not say whether you should agree to arbitration in any specific case. The CFPB also lists a complaint channel — online or by calling (855) 411-CFPB (2372) — as one way to report a mortgage problem. A complaint reports a concern; it is not a finding about a particular dispute.

Sources reviewed

Last reviewed

September 10, 2026