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U.S. home sales are up to a 14-year high thanks to record-low interest rates and J.D. Power reported a 200% annual increase in refinancing. While these numbers are helping mortgage companies reach banner years, J.D. Power's U.S. Primary Mortgage Origination Satisfaction Study points out underlying problems that could create challenges down the road.
"It’s been a complicated year for the mortgage industry," said Jim Houston, managing director of consumer lending and automotive finance intelligence at J.D. Power. "Between surging customer volumes on the origination side, an influx of customer inquiries on the servicing side and a workforce that has been completely displaced by the pandemic, resources have been stretched to their limits. That strain is showing up in slower loan processing times, missed opportunities to communicate and unreliable self-service tools. While some of these shortcomings may have been opportunities in prior years, current market conditions and customer satisfaction metrics indicate that mortgage originators need to look hard at fixing them if they want to stay viable."
According to the J.D. Power report, overall customer satisfaction is up and has been attributed to the competitiveness of rates. However, the report points out that this success masks service areas like loan processing time, ease of self-service interaction and helpfulness of customer service which have all seen declines in satisfaction levels from 2019.
Additionally, the report revealed that the average refinancing processing time has increased to 42 days, up from 39 in 2019. J.D. Power's report also revealed that the number of customers using self-service channels increased by 5%, while the number of customers using personal service channels declined by 5%.
More interaction looks to be one of the keys when it comes to customer satisfaction, as the report shows that lenders who communicate more with their customers during the application, closing and onboarding processes, the more customer satisfaction improves.