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Mortgage

Lenders, here’s how to make sure borrowers won’t regret choosing you

Results are in for latest J.D. Power survey

More than 5 million people are expected to buy an existing home next year, creating a significant pool of potential mortgage customers. Don’t miss the opportunity to step up, especially now that TRID isn’t as much of an issue to focus on. According to the latest J.D. Power 2016 U.S. Primary Mortgage Origination Satisfaction Study, a high percentage of homebuyers are remorseful about their mortgage lender selection, creating the chance for companies doing it right to stand out.

The survey examines customer satisfaction with the origination experience among the largest mortgage lenders in the United States. The study provides a broad understanding of how firms can improve mortgage customer satisfaction, loyalty, and advocacy across six key factors: loan offerings, application/approval process, interaction, closing, onboarding and problem resolution.

The study found that 21% of customers purchasing a home express regret over their choice of lender, and 27% of first-time homebuyers regret their choice.

Customers having a poor experience are often more vocal about their displeasure, making an average of nine negative comments, compared with the study average of 0.7.

Problems in this category include an above-average incidence of problems, lack of communication and unmet promises.

However, the survey noted that there is a second type of remorse borrowers feel that may not show up right away.

“This ‘happy buyer’s remorse’ is in part due to customers feeling that circumstances out of their control drove them to a particular choice and that options weren’t totally clear,” said Craig Martin, director of the mortgage practice at J.D. Power.

“Like a lot of consumers, they are happy with a good deal, but they can feel that they have to jump through hoops to get the deal,” said Martin. “In the end, they may not fully understand exactly what they got, and the longer-term risk for lenders is that customers’ perceptions of the deal may change in the future.”

The survey noted that this group tends to be very price-focused and frequently obtains multiple quotes. Ultimately, they tend to go with an option linked to financial concerns, such as getting a lower rate because they have a relationship with the firm (e.g., checking account with direct deposit).

Among customers who regret their lender selection, 72% indicate they were pressured to choose a particular mortgage product.

The survey speculated that one potential contributing factor to this condition could be the TILA-RESPA Integrated Disclosure rule, but this problem could be starting to fade.

“Whether it is a new regulation, shifting rates or new technology, lenders will continue to face challenges that require them to change,” Martin said. “Regardless of what comes, if lenders focus on the needs of the customer and execute on key best practices they can positively influence perceptions and minimize the negative effects on customers.”

Check out the chart below to see which companies ranked the highest in the survey.

One company, Quicken Loans, ranked the highest in primary mortgage origination satisfaction for a seventh consecutive year.

“To repeatedly be recognized as the industry’s client service leader is a true testament to the core principles our company has operated on for more than 30 years,” said Bill Emerson, Quicken Loans CEO. “Even more significant, it’s clear that it doesn’t stop here as we continue to grow and develop new technologies that improve the mortgage experience for our clients.”

Click to enlarge

survey

(Source: J.D. Power) 

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