Wachovia ranks highest in HELOC customer satisfaction for second yearMortgagePress.comBest HELOCs
For a second consecutive year, Wachovia ranked highest in
satisfying customers who recently obtained a home equity loan or
line of credit, according to the J.D. Power and Associates 2007
Home Equity Line/Loan Origination Study.
Now in its second year, the study measures customer satisfaction
with home equity line/loan lenders. Three factors are examined to
determine overall satisfaction. They are, in order of importance:
closing process (36 percent), loan officer/representative or banker
(34 percent) and application/approval process (31 percent).
The study found that highly committed customers were four times
more likely to stay with their current home equity lenders and
three times more likely to recommend their lenders to friends and
family than customers with moderate and low levels of commitment.
Highly committed customers also possessed nearly twice as many
additional financial services. A modest five-percent shift in
customers from moderately to highly committed levels could lead to
tens of millions of dollars in new and retained loan balances and
deposit balances for the typical lender included in the study.
Wachovia received an overall index score of 831 on a 1,000-point
scale, performing particularly well in all three factors
contributing to customer satisfaction. SunTrust followed Wachovia
in the rankings with an index score of 794, improving by 74 index
points since 2006. U.S. Bank, which was included in the study for
the first time, followed SunTrust with an index score of 787.
Additionally, Wachovia had a considerable percentage of highly
committed customers—32 percent, compared to an industry
average of 19 percent. Among home equity customers, those who were
highly committed were two to three times more likely than
moderately committed customers to refinance or stay with their
current lenders, recommend their lenders to others or consider them
for their next home equity loan.
"Wachovia manages to do everything well across the
board—from the application process to closing—and it
shows in the results," said Tim Ryan, senior research director of
the finance and insurance practice at J.D. Power and Associates.
"It is particularly impressive that Wachovia records a 63-point
improvement above their top-ranking score in 2006. They have made
notable strides in shortening application processing and funding
times. This improvement in timeliness, coupled with Wachovia's
competitive rates, are important drivers in their high levels of
customer satisfaction."
The study also found that overall satisfaction had increased
considerably across the industry, currently averaging 766 index
points compared with an average of 725 in 2006. This increase was
driven by improvements in loan processing times, proactive
communication with customers about the status of their loan
applications and a lower incidence of borrowers paying closing
costs. On average, the amount of time it takes to approve an
application has improved by an average of three days, from 11 in
2006 to eight in 2007. The length of time between application
approval and availability of funds to customers decreased by two
days on average, from eight days in 2006 to six days in 2007. In
addition, loan representatives performed better in explaining the
steps of the loan origination process, including providing
timeframes for completion and informing customers of their credit
scores.
"These improvements are good news for both customers and
lenders," said Ryan. "Timeliness of application approvals and
availability of funds means that the loan origination process is
becoming more convenient for customers. In addition, lenders are
understanding the importance of setting expectations about the
process and proactively communicating with customers to manage
those expectations. Customers who say they have an error-free loan
experience tend to recommend their lenders at a higher rate, so the
payoff can be considerable for lenders whose customers are highly
satisfied."
The study also found that 26 percent of consumers who shopped
for a home equity line of credit or loan chose a lender with whom
they had an existing relationship. Along with home equity accounts,
customers most frequently utilized checking accounts (47 percent),
credit cards (38 percent) and primary mortgages (23 percent) with
the same lender.
For more information, visit www.jdpa.com.
