Loan Officer Relationship is Key to High Levels of Customer Satisfaction

WESTLAKE VILLAGE, CA/October 20, 2008: PRNewswire/In the current economic situation, improving the relationship between loan officers and mortgage customers is critical to customer satisfaction, according to the J.D. Power and Associates 2008 Primary Mortgage Origination Satisfaction Study(SM) released today.

This study measures customer satisfaction in four key factors of the mortgage origination experience: application/approval process; loan officer/representative or mortgage broker; closing process; and problem resolution.

The study finds that customers have higher levels of satisfaction and are more committed to their lender when the loan officer takes the uncertainty out of the mortgage origination experience by setting expectations, proactively communicating and maintaining personal contact with them during the loan process.

For example, customers have considerably higher levels of satisfaction when their loan officer provides a time frame for their application approval.  Similarly, customers are more satisfied when status updates are provided, last-minute requests for information are limited, mortgage servicing options are discussed, and when loan officers meet with customers in person and attend the closing. 

In addition, customers who report being highly committed to their lender as a result of a superior origination experience are two and a half times more likely to recommend the lender to others and to use the lender for another mortgage. These highly committed customers also use twice the number of additional financial services with their lender, on average, compared with customers with lower commitment levels.

"Many customers blame financial institutions for the current economic situation, and many also have doubts about their futures," said Tim Ryan, director of the financial services practice at J.D. Power and Associates. "In such an uncertain environment, it becomes especially important for lenders to re-establish trust with customers through the loan officer relationship. About one-half of mortgage customers express some level of doubt about whether their loan representatives are acting in an ethical and honest manner and in their best interest, which indicates an opportunity for higher levels of satisfaction through an improved customer-lender relationship."

SunTrust Mortgage ranks highest among primary mortgage lenders with a score of 790 on 1,000-point scale, performing particularly well in two factors driving satisfaction: application/approval process and closing process. National City Mortgage (788) and Wachovia (786) follow SunTrust Mortgage in the rankings. National City Mortgage performs particularly well in the loan officer/mortgage broker factor.

Despite increased doubts about the financial market and mortgage lenders, the study finds that mortgage customers are more satisfied overall in 2008 compared with 2007, with the industry average increasing slightly, to 757, which is up 7 points from 2007. Improvements are evident in several key performance measures: fewer customers report being asked for additional information after submitting their application; more customers are being provided with timeframes for application approval; and fewer customers report that their closing costs are higher than originally estimated.

"The increase in overall satisfaction can be attributed, in part, to lower customer expectations," said Ryan. "After hearing so much bad news throughout the industry, customers have come to expect less from their lenders, so they are often pleasantly surprised when those expectations are met or even exceeded. At the same time, lenders are more diligent in delivering the elements of the experience that drive satisfaction."

The study also finds that customers can improve the quality of their experience when obtaining a mortgage by keeping the following guidelines in mind:
  • As part of the selection process, ask whether the loan will be sold or its servicing transferred — and if so, how billing, payment, and escrow management might be affected.
  • Ask for a full explanation of the entire process from application to closing (e.g., what the steps are, what will be required, expected timeframes).
  • Discuss the initial estimate of closing costs in detail, and determine which of the costs could change and why.
  • Request updates or status reports at key junctures in the process — for instance, when preliminary approval has been given or when the appraisal is complete.
  • Prior to closing, ask to review and get an explanation of the following: the closing document; final closing costs; and billing and payment options.
"Satisfaction is a two-way street, and customers too often underestimate how much they can contribute to a positive outcome for themselves," said Ryan. "Following these five simple steps can lead to a more satisfying mortgage origination experience."

The 2008 Primary Mortgage Origination Satisfaction Study is based on responses from 4,256 consumers who originated new mortgages within the previous 12 months. The study was fielded in June 2008.

Customer Satisfaction Index Ranking
(Based on a 1,000-point scale)

Lender Index Score J.D. Power.com Power Circle
Ratings For Consumers

SunTrust Mortgage                     790 5
National City Mortgage                788 5
Wachovia                                   786 5

Wells Fargo                                766 4
Bank of America                         764 4
WaMu/Washington Mutual           764 4

CitiMortgage/Citibank                  760 3
Industry Average                       *757 3*

GMAC Mortgage                         742 2
Chase                                        729 2
Countrywide Home Loans            728 2

Included in the study but not ranked due to small sample size are: Beneficial, Branch Banking and Trust, CitiFinancial Mortgage, Fifth Third Bank, First Horizon Home Loans, Flagstar Bank, HSBC Mortgage Services, IndyMac Bank, PHH Mortgage/Cendant, Quicken Loans, Taylor, Bean & Whitaker Mortgage and U.S. Bank.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

Source: J.D. Power and Associates

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Posted by Mark Rodrigues at 10/21/2008 10:37 AM
Categories: Customer Satisfaction,Mortgage
 

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