While data from JD Power’s Primary Mortgage Origination Study has found that technology offerings (the ability to apply, submit documents, track status online) can raise customer satisfaction, it is important to note that customers still desire a ‘personal touch’ during the origination process.
Satisfaction is highest when customers work with one representative throughout the entire process. However, if a ‘handoff’ is necessary from one lender employee to another, it is critical to ensure that customers consider the transition ‘smooth’. Failure to ensure a smooth transition can significantly impact satisfaction and loyalty metrics, while also resulting in an increase in reported customer problems.
Data from J.D. Power’s 2013 Primary Mortgage Origination (PMO) Study identifies growing consumer demand for a more digital origination experience. Providing customers with an online option to submit supporting documents, verify receipt of their application, check status of their application and electronically sign documents can have a significant impact on satisfaction.
Quicken Loans, the top performer in the 2013 PMO study, has been among the quickest to provide a digital experience for their customers, which has helped drive their industry-best satisfaction score.
Overall customer satisfaction with mortgage lenders has reached its highest level in the past six years, according to our J.D. Power and Associates 2012 U.S. Primary Mortgage Origination Satisfaction StudySM released today.
For a second consecutive year, overall customer satisfaction has increased to 761 (on a 1,000-point scale) in 2012 from 747 in 2011 and 734 in 2010. This increase in customer satisfaction is driven by steady improvements related to transparency and communication. The study finds that during the past three years, lenders have improved in the following areas:
- Clearly explaining loan options and ensuring customers understand them
- Following up with customers in a timely manner after they complete their application
- Proactively updating customers on the status of their application
Furthermore, the results of the study show that there is a strong relationship between satisfaction with the origination process and the rates of customer consideration and usage of the same lender for refinancing. Among loan customers who have refinanced in 2012, only 40 percent cite price as their main reason for selecting their lender. Other reasons commonly cited for selection include an existing relationship; previously being a customer; and referrals.
Register for the complementary 2012 Primary Mortgage Origination Satisfaction Study Webcast
Date: Thursday, November 29
Time: 2:00 – 3:00 PM EST
By Craig Martin, Director-Mortgage Practice AND Paula Bibik, Sr. Research Manager-Financial Services
With the Consumer Financial Protection Bureau (CFPB) poised to implement mortgage servicing rules early next year, the threat of investigations and significant fines for non-compliance further raises the stakes of failing to provide a quality customer experience. Banks that consistently deliver a high level of service and have the processes and procedures in place to comply with the new CFPB requirements will certainly be ahead of the game.
The proposed CFPB rules are heavily focused on billing and payment processes; clarity of communication; and the quality of a mortgage servicer’s customer service when they are contacted. The chart below indicates how the proposed requirements align with key factors measured in our 2012 U.S. J.D. Power and Associates Primary Mortgage Servicer Satisfaction Study.
We offer the following actionable tactics to help servicers address performance improvement initiatives, and remain ahead of the customer satisfaction curve before the new CFPB guidelines are implemented:
Billing and Payments
For the majority of mortgage servicing customers, the billing and payment process represents the entirety of their relationship. When servicers avoid errors and provide correct and timely information that customers understand, the relationship is generally positive for both parties.
1. Leverage online communications and electronic billing to improve the customer experience
The study indicates that over half of all customers still receive a paper bill despite the fact that those customers have the lowest average satisfaction in the billing and payment factor and the majority of customers pay their mortgage bill electronically. Online communications and billing are becoming a way of life. According to a recent Pew Research Center study (1) 80% of American adults use the internet, and 88% have a cell phone, with nearly half of the adult population (46%) being smartphone owners. As adoption of these various technologies continues to rise, traditional concerns related to security and the desire for paper documents are being replaced by a preference for greater convenience and timely information. Servicers should continue to promote this option to customers and educate them on the benefits of adoption.
2. Utilize multiple touch points to communicate billing
Problem prevention is the name of the game. Overall satisfaction declines by over 100 index points (on a 1,000-point scale) when a problem is experienced. In the study, nearly one third of respondents said they experienced a problem in the past 12 months. Some of the most common issues are related to Billing and Payment and while contacting customers via multiple channels to alert them of an upcoming bill or change may seem unnecessary, over-communicating ensures transparency and demonstrates that mortgage servicers are making every effort to keep customers informed. Start early with a billing and payment guide at the beginning of the relationship when customers are likely to be more engaged. When changes occur in the future don’t rely on just one method of communication. A statement stuffer may get tossed in the trash, but if you combine it with online messaging and other channels you improve the chance the information will be received and prevent the need for a call.
3. Ensure that the online payment process is easy
The majority of customers pay their bill electronically, yet almost forty percent of respondents in the study that pay electronically indicated that making an online payment is “not very easy”. The Billing and Payment Process satisfaction declines by 168 index points when customers say their online payment is difficult to make. To help improve the process ensure the website is reliable and consistently available; easy to navigate and use; and provides clear instructions on payment options. Taking the time to educate customers can pay dividends. Among homeowners surveyed who receive a welcome packet that includes billing and payment information, almost three quarters say that making an online payment is “very easy”.
THE BOTTOM LINE:
When it comes to mortgage servicing, Benjamin Franklin’s immortal words sum it up well, “an ounce of prevention is worth a pound of cure”. To the extent that companies can approach the proposed CFPB guidelines as an opportunity to prevent problems, and become more efficient they will experience a win-win situation of both complying with regulations and improving customer satisfaction.
 The Pew Research Center’s Internet & American Life Project’s February Tracking Survey conducted January 20 – February 19 2012.
For more information, or to purchase a copy of this 2012 U.S. Primary Mortgage Servicer Study , please contact: Holly Zagresky at (248) 680-6319 or via email at Holly_Zagresky@jdpa.com
According to our 2012 U.S. Primary Mortgage Servicer Satisfaction Study released today, Phone Contact accounts for only 15% of the overall Satisfaction Index. However, when a customer has a phone contact with their mortgage servicer, this experience increases in importance and accounts for 57%, becoming the most important factor in determining the customer’s overall satisfaction.
Improvement in this area is critical for banks, and the following best practices will help you to create a more positive customer experience:
Emphasize the “who” vs. the “what”
In many cases, customers who call their servicer are facing major financial challenges that require understanding and empathy. When reps do not demonstrate concern and courtesy, they jeopardize the effectiveness of any knowledge they convey.
Understand what resolution customers seek and set appropriate expectations
Mortgage servicers should take the time to understand customers’ goals before explaining the steps to achieving them and establishing a realistic time frame for resolution.
Strive for first-call resolution
Even when problems are not resolved, avoiding the need for additional customer contacts improves their experience. For more complex issues, set clear expectations and proactively contact customers with updates so they will not need to follow up.
Focus on addressing the most common issues, with first-call resolution as a goal
Designing a simple process to address the most common issues reduces the time needed to achieve resolution. It also demonstrates a level of competency that improves customer confidence in the solutions being provided. Plus, it helps employee morale!
For more insights and best practices, join us for the 2012 Primary Mortgage Servicer Satisfaction Study webcast!
Complementary Webcast Details:
Date: Thursday, July 26 – 2:00 PM EST
For more information regarding this study, please contact: Holly Zagresky at (248) 680-6319 or via email at Holly_Zagresky@jdpa.com
Data Source: The chart included in this post is from J.D. Power and Associates 2012 U.S. Primary Mortgage Servicer Satisfaction Study.
2012 Primary Mortgage Servicer Satisfaction Study
Increasing governmental oversight, the credit crisis, the overall state of the economy, and negative media coverage have created a challenging environment for the mortgage servicing industry. To help mitigate these negative effects, mortgage servicers need to understand and apply key best practices that result in the highest levels of customer satisfaction.
Join us for the 2012 Primary Mortgage Servicer Satisfaction Study webcast during which we will explore the following:
- How customer’s perceptions of mortgage servicers have changed since 2011
- How the latest regulations and trends are impacting the mortgage servicing industry
- Which factors are having the biggest impact on satisfaction of mortgage servicers’ customers
Complementary Webcast Details:
Date: Thursday, July 26 – 2:00 PM EST
2012 Credit Card Satisfaction Study Findings
In addition to preliminary findings from the study, we will also present information from the following new sections:
- Satisfaction with new card application and activation
- Mobile and social media interactions
- Expanded diagnostics around online interactions
NEW! Credit Card Website Evaluation Study
Given that online interactions are the single most important factor affecting overall customer satisfaction, we will discuss the following:
- The interactive surveying approach
- The comprehensive task set covering the full range of credit card online transactions
NEW! Small Business Credit Card Satisfaction Study
There is evidence that satisfaction rankings of small business card issuers will fall out differently than the traditional consumer rankings. During this webcast, we will:
- Share results from the 2011 Small Business Banking Satisfaction Study
- Present a proposal for a new study, the Small Business Credit Card Satisfaction Study, which will help credit card issuers understand the drivers of small business customer satisfaction and in turn improve ROI for this key customer segment.
Complementary Webcast Details
Date: Tuesday, July 31 – 2:00 PM EST
We are pleased to announce that Craig Martin has joined J.D. Power and Associates as a Director in the Financial Services Practice.
In this role, Craig will focus on developing and delivering high-quality insights, recommendations, and presentations for the investment services and mortgage practice.
Craig brings a wealth of knowledge regarding customer experience. Most recently, he worked as a Product Manager/Vice President at BBVA Compass, where he lead initiatives and projects in support of efforts to increase sales, reduce errors, and improve the customer experience, including development of product packages and a new online account recommendation tool.
Prior to joining BBVA Compass, Craig worked at Regions Financial as an Incentive System and Process Development Manager/Vice President.
He holds an MBA from the University of Georgia, Terry College of Business and a BA in Economics from Vanderbilt University.
If you are interested in scheduling a meeting with Craig, he can be reached directly at Craig_Martin2@jdpa.com
Overall customer satisfaction with primary mortgage lenders has increased considerably from 2010, according to our 2011 U.S. Primary Mortgage Origination Satisfaction Study. Customer satisfaction in 2011 averages 747 on a 1,000-point scale, up 13 points from 2010.
The study measures customer satisfaction in four key factors of the mortgage origination experience:
1. Application/approval process
2. Loan representative
According to David Lo, Director of Financial Services at J.D. Power and Associates, “the increase in customer satisfaction is driven by improvements in many of the key best practices, including proactive status updates, providing a time frame to expect and meeting it, and providing follow-up contact after the application is submitted. This increase in satisfaction is in stark contrast to the mortgage servicing industry, in which homeowner satisfaction has declined significantly from 2010.”
“The reality today is that it’s a lot harder to get credit than it was a few years ago,” said Lo. “Many homeowners are stuck in their current mortgage and are unable to refinance due to credit or equity challenges, and they’re not happy about it—thus the drop in satisfaction for mortgage servicing. But on the mortgage origination side, among customers who are able to get credit, lenders are taking the extra steps needed to please their customers, and it shows.”
Primary Mortgage Origination Ratings
Quicken Loans ranks highest among primary mortgage lenders for a second consecutive year with a score of 818, and performs particularly well in the application/approval process and closing factors. SunTrust Mortgage follows in the rankings with a score of 791, performing particularly well in the loan representative and closing factors. ING Bank ranks third with a score of 789. Continue reading ›