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While the mortgage industry managed to thrive during the COVID-19 with record mortgage origination volume, J.D. Power found that mortgage originators struggled to manage the surging refinance volume and efforts to streamline new issuance with one-size-fits-all digital workflows. The company states that as a result, customer satisfaction has eroded at critical points.
“Mortgage originators have been working for years to create an effective and efficient origination process, primarily through digitization of the process and implementation of self-help tools, but the massive surge in volume has exposed some serious weaknesses in that approach,” said Jim Houston, managing director of consumer lending and automotive finance intelligence at J.D. Power. “It’s not enough to provide consumers with electronic applications and digitized tools to streamline and expedite activities up to and including loan closing. Today’s mortgage customers expect personalized, highly customizable experiences that include the right mix of technology and personal interactions based on their unique needs and wants.”
According to the report, customer satisfaction fell across most segments, and overall customer satisfaction with primary mortgage originators dropped by five points. J.D. Power states that this decline was largely driven by declines in satisfaction with the refinancing process.
“More than three-fourths (76%) of Generation Y and Z mortgage customers who use both live personal service and digital self-service channels during the application and approval process say they 'definitely will' consider their lender for their next refinance. That rate falls more than 10 percentage points when only one of these two channels is used,” according to the report.
Additionally, among Gen Y and Z mortgage customers, this demographic believes the process from application start to approval is shortest when combing live personal service in combination with digital self-service.
“The industry challenge is not to go all digital or all live personal service, but to tailor the right communication to the right customer at the right time,” according to the report.