J.D. Power and Associates released a new study of customer satisfaction for primary mortgage borrowers in the U.S. The study revealed some interesting reasons for satisfaction or non-satisfaction with a mortgage originator.
Homeowners ranked USAA Federal Savings Bank the highest in customer satisfaction when it comes to the service of a primary mortgage, according to the survey.
The customer satisfaction was calculated in four areas: the administration of the account, the billing process, the payment process and the process of contacting the mortgage servicer.
"USAA Federal Savings Bank is simply doing things right and doing them right the first time," said Rocky Clancy, the executive director of the mortgage practice for J.D. Power and Associates. "When USAA makes commitments to their customers, they meet those comitments. Customers will forgive mistakes, but they tend not to forgive broken promises. Problems are inevitable, but having a proper approach to those issues can speak volumes."
The study revealed that around 45% of mortgages do not remain with the originator for servicing after the mortgage is closed. Those consumers with outsourced mortgages on average have satisfaction score of 32 index points lower.
"While this is a common practice in the industry, removing the homeowner from the decision to sell the mortgage to a different company for servicing can create confusion and a sense of betrayal among customers," explained Clancy.
"Customers want stability and consistency with their home loans, and lenders who can deliver those are rewarded with customers who are not only more satisfied and loyal, but also have twice as many additional products with the lender."
Fifty percent of customers pay their mortgage bill electronically, a surge from the 34% in 2004. The study revealed that electronic payments result in a higher customer satisfaction level overall.
"The more billing and payment of mortgages is automated or conducted online, the more consistent and accurate loan servicing becomes, ultimately leading to higher levels of customer satisfaction," said Clancy.
"The bottom line is that satisfied customers require less contact with their servicer's customer service department, resulting in lower servicing costs for the lender.
"In addition, mortgage servicers who are successful in satisfying their customers can expect greater revenue as a result of customers recommending the company to others more often, and obtaining additional non-mortgage services from the lender."
The study was based on responses from 12,799 homeowners between March and April of 2006. The top ten mortgage servicers according to satisfaction ranking were:
- USAA Federal Savings Bank
- BB&T
- Citizens Bank
- GMAC Mortgage
- Wells Fargo
- Bank of America
- First Horizon Home Loans
- CitiMortgage
- SunTrust Mortgage
- Fifth Third Bank
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!
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