Borrower satisfaction of mortgage lenders up substantially since 2010
While customer satisfaction in the mortgage servicing industry stumbles, consumers have grown considerably more content with mortgage lending over the past year, according to J.D. Power and Associates. The increase in satisfaction of primary mortgage lenders was driven by improvements in status updates, time frame expectations and application followups, said David Lo, director of financial services at the global marketing information company. Lo said the increase is in stark contrast to the mortgage servicing industry, in which homeowner satisfaction has declined significantly since 2010. The J.D. Power and Associates 2011 U.S. primary mortgage origination satisfaction study produced a score of 747 on a 1,000-point scale, which is up from 734 in 2010. This is the first annual increase since 2008. The average score was 750 in 2007, 757 in 2008 and 739 in 2009. The study measures customer satisfaction in four factors of the mortgage origination experience: application/approval process; loan representative; closing; and contact. Quicken Loans ranked highest among primary mortgage lenders for a second consecutive year with a score of 818, performing well in application/approval process and closing. SunTrust Mortgage (STI) followed with a score of 791, scoring high in loan representative and closing. ING Bank achieved third place with a score of 789. See chart below. SunTrust topped the study's rankings in 2006 during the height of the housing bubble, with a score of 782. The study found that lenders who improved customer satisfaction increased market share. Lenders with a substantial increase in origination satisfaction since 2009 improved in overall satisfaction by an average of 35 points, and their collective market share increased by nearly 5%, according to the study. In contrast, brands that declined substantially in satisfaction from 2009 to 2011 experienced a 25-point drop in score. Their collective market share declined by nearly 5%. Conducted during the third quarter, the study surveyed more than 3,600 customers who originated new mortgages between the beginning of July and end of September. "In this current environment, the perception among some is that what's good for the customer isn't necessarily good for the lender," Lo said. "However, we see a clear relationship between a lender's ability to deliver a superior customer experience and the relative impact on higher loyalty, retention and advocacy." Write to Justin T. Hilley. Follow him on Twitter @JustinHilley.