Origination News Feature Story

Average Customer’s Satisfaction Rate Inches Up

By Bonnie Sinnock

WESTLAKE VILLAGE, CA—The average customer’s satisfaction with mortgage originators has risen slightly as consumer expectations have fallen and lenders have become more diligent, according to a yearly study by J.D. Power & Associates here.

The average satisfaction rate for mortgage originators on a scale of 1-1,000 was 757, seven points up from the previous year.

The top 10 originators received the following scores: SunTrust Mortgage (790), National City Mortgage (788), Wachovia (786), Wells Fargo (766), Bank of America and Washington Mutual (both scored 764), CitiMortgage/CitiBank (760), GMAC Mortgage (742), Chase (729) and Countrywide (728).

When asked how the company rankings for this year compared to years past, J.D. Power financial services practice director Tim Ryan noted that “SunTrust did well last year and has consistently done well, as has Wachovia.” Bank of America which slipped slightly to No. 5 this year, had held varying positions among the top three with SunTrust and Wachovia the previous two years. Mr. Ryan said he still considered BoA to have fared well in this year’s rankings. National City, which ascended to No. 3 this year, had been ranked No. 4 in 2007.

SunTrust showed particular strength in the application approval and closing process, two of the four categories J.D. Power examines in assessing customer satisfaction, said Mr. Ryan. National City scored particularly well in terms of its loan officers’/mortgage brokers’ relationships with customers. The company gives its strongest weighting to respondents’ opinions of app approval and closing processes, and slightly less weight to LO/broker relationships. The fourth factor, problem resolution, has a percentage weighting in the single digits but it also tends to color an individual’s opinions overall, Mr. Ryan noted.

Mickey Chainski, senior vice president and marketing manager at SunTrust Mortgage, and Nancy Harmon, SVP and service quality director at the company, said practices they think have consistently contributed to ranking the company highly in the JDP study have included the importance placed internally on loan officers’ person-to-person interaction with borrowers and customer retention from the point-of-sale to closing, as well as its average eight days of turnaround time between application and closing. J.D. Power also indicated that survey respondents viewed the company favorably because they felt it provided accurate closing cost estimates. The only category where the company didn't excel was problem resolution and that was only because they didn't receive enough responses in that category, according to the two SVPs.

In conducting focus groups with consumers designed to ensure the company and its studies continues to be “on the same page” with them, Mr. Ryan said J.D. Power found that “almost half the time there is some level of distrust with loan officers,” a phenomenon he feels may be due in part to widespread mainstream media coverage of the issue. He said it is an opinion he does not necessarily agree with but one that needs to be addressed. “That’s an awfully high percentage, so that’s something companies need to work on,” he said.

As in past years, Mr. Ryan said J.D. Power has found that mortgage brokers have a tougher row to hoe than loan officers working for direct lenders when it comes to customer satisfaction.

This is in part because the third-party nature of their work can lead to communication gaps with their lenders, he said. They tend to be called upon to provide loans in more complex and difficult situations, which can be helpful if they are seen as problem solvers but also can lead to negative associations if the process proves difficult or frustrating.

Although many companies have exited wholesale entirely or made deep cuts to it this year, the percentage of J.D. Power respondents who had closed loans with brokers decreased by only 6% this year to 28% from 34% last year, Mr. Ryan said.