Satisfaction with servicing declines for a second consecutive yearMortgagePress.comPrimary Mortgage Servicer Study, billing, payments, lender contact, annual account administration
For a second consecutive year, customer satisfaction with the
servicing of mortgages declined, according to the J.D. Power and
Associates 2008 Primary Mortgage Servicer Study released today.
The study measures customer satisfaction with four areas of loan
servicing: billing; payments; contact with the lender; and annual
account administration. Overall satisfaction in 2008 decreases 14
index points to 784 on a 1,000-point scale, down from 798 in 2007
and 812 in 2006. Increased billing errors, more service
"hand-offs," and a larger number of customers making late payments
all contribute to lower satisfaction levels.
"For most customers, their mortgage servicer is akin to a
utility company—they just want things to work, and they
expect a friction-free experience," said Rocky Clancy, executive
director of financial services at J.D. Power and Associates. "Any
bumps in the road that cause customers to have to spend time asking
questions or solving problems negatively impact satisfaction,
particularly if they have to call more than once or talk to more
than one person to get their issues resolved."
The study finds that, in addition to reducing the number of
problems and improving the resolution experience, a key to customer
satisfaction is increasing customer adoption of electronic billing
and payments. Fifty-six percent of customers report making payments
through an automatic deduction or a Web site, compared with 36
percent of customers making payments by mail. In 2006, 49 percent
of customers made payments electronically, while 42 percent paid
via mail.
"Satisfaction with payment processing is 50 points higher for
people making payments electronically instead of through 'snail'
mail," said Clancy. "Automatic deductions, in particular, are
associated with fewer problems because once things are on
auto-pilot, the chances of something going wrong are slim."
Branch Banking and Trust (BB&T) ranks highest among primary
mortgage servicers for a second consecutive year with a score of
839. BB&T performs well in all four areas driving satisfaction
and achieves high levels of commitment from its customers. SunTrust
Mortgage (825) and Wells Fargo (813) follow BB&T in the
rankings.
Customers with high levels of commitment to their primary
mortgage servicer are more than three times more likely to say they
"definitely will" continue to do business with their current lender
than those customers with moderate levels of commitment.
"Primary mortgages tend to be a highly commoditized product, so
lenders can benefit considerably by increasing loyalty among their
current customers," said Clancy. "Highly committed customers tend
to make more recommendations, intend to use the mortgage servicer
again in the future, are less likely to switch and are more likely
to use multiple products with the same firm—all of which help
to benefit a lender's bottom line." In addition, servicers stand to
earn considerable financial gains by making improvements in key
areas, according to the study.
"By improving the billing and payment processes, reducing the
number of problems, improving retention and increasing the
acquisition of new customers through recommendations, lenders may
generate increased annual profitability of approximately $30
million for every one million loans serviced," said Clancy. The
2008 Primary Mortgage Servicer is based on responses from 10,241
home owners regarding their experiences with their primary mortgage
servicer. The study was fielded in July 2008.
For more information, visit www.jdpower.com.
