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What I've Learned About Borrower Satisfaction

MAY 21, 2014 5:32pm ET
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Last week, I wrote a self-indulgent column about how a single comment from me, reprinted in National Mortgage News, literally changed the face of the industry. Shortly after I came out in support of the fine folks at Fannie and Freddie, their federal regulator announced plans to prop up their efforts for the foreseeable future, changing our industry for 2014 and beyond.

I was joking, of course. It is very unlikely that my comments had any influence on Mel Watt, who, as far as I know, is not a regular reader of my column. After all, Iím sure heís spending his time on position papers that go into much greater detail on the agencies, such as those produced by our friends at the MBA.

Itís OK. I can live with the disappointment of not being regularly read by our regulators, especially since some of my recent content has been pretty well accepted by those in the industry, specifically midsize to larger lenders. In fact, over the past week or so, Iíve been quite pleased by the response to one piece of work I recently completed, although I suspect it has more to do with the critical nature of the topic and even concern about the regulators than my powerful prose.

Over the past year or so, Stratmor has been doing some in-depth research into borrower perception of the mortgage process in an attempt to understand how lenders can measure their performance in meeting borrower expectations and also influence borrowers to take specific actions that may benefit their businesses. On this white paper, I worked with our senior partner, Matt Lind, who has more degrees from MIT than I have degrees. The exercise was a great learning experience, both for me and apparently for some of our readers. Let me explain.

The first thing I learned is that, while every lender will tell you they measure their customer satisfaction, there has not been a standardized method of measuring what borrowers really think about our process and no insight into what actions our borrowers may take after leaving the closingówith the exception of very frequently not working with the same lender again. When we started looking for a tool to reliably measure borrower satisfaction, we had to go outside of our industry to find one.

The second thing I learned was that mortgage borrowers are not passive consumers. If they are pleased, they will take actions that will absolutely improve the lenderís business. But when they are not (which is about 5%-10% of the time) they will tell others about their dissatisfaction. So, do you want that feedback directly, or would you rather have the customer tell the CFPB?

Perhaps most important was our finding that there are certain satisfaction drivers that, if understood, can allow lenders to solve satisfaction problems before they become complaints and influence satisfied borrowers to help a lenderís business. Here is the amazing partósince the paper came out, about two weeks ago, it has been downloaded by executives of 100 medium-sized and larger lenders ($500 million annual volume or more). Given that there are only about 500 lenders of that size in the business, that means that about 20% of the industry now has a better idea of what customer satisfaction means here.

One other thing that I learned in the process of contributing to this white paper project is that I am able to write longer pieces of material without the need to rely on jokes. For those of you who read me weekly in this space, you only get the 1,000 word versions and they usually are sprinkled with jokes and the occasional sarcastic comment. (I once had a colleague suggest to me that sarcasm was just veiled hostility. I replied that he was an idiot and that I was not hostile at all.)

All kidding aside, white papers donít always get much respect in our industry, probably because so many are just veiled brochures, pitching products and services. This project, and the positive response it has received thus far, have shown me that a good topic, and a timely issue backed up by data, can bring an important issue into focus. Next week I will have some more perspective on trends in customer satisfaction over the last few months and insights into some findings that I found very surprising.

If you want to focus some attention on the customer experience in your shop, reach out to me and Iíll get you a copy of the paper. After all, satisfied customers are no joking matter.

Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience.

Comments (3)
People are not happy with the intense requirements involved in a mortgage and the underwriters who demand more and more documentation during the whole process. We all give a sigh of relief when the deal is finally closed. No one is happy with the process until it is over.
Posted by Constance B | Thursday, May 22 2014 at 2:56PM ET
Borrowers are not happy with the process because the underwriting guidelines, regulations, pricing, and other bureaucratic nonsense makes little sense to the average borrower. The reality is that the borrower is not even the real customer of mortgage lenders anymore. The customer is the secondary market investors & fannie mae/freddie mac. Mortgage lenders care about satisfying the end investors, not whether the borrower is happy or not.

Next to healthcare, mortgages have got to be the most dysfunctional industry. Not surprisingly, both have government as the common factor.
Posted by | Thursday, May 22 2014 at 8:11PM ET
IT IS RONG THAT A HOME IN A IRROVICABLE TRUST ONED BUY TRUST 2008 REVERCE MORTAGE GUIDLINES AND PROCIDURES PAGE 54 55 56 ABSOUTLEY NO PROPRTY IN A TRUST THAT BECOMES IRROVICABLE AT DEATH. AND THE NAME ON GRANT DEED AND BROWERS NAME HAS TO BE THE SAME THE PREDATORY LENDER WAS TOLD THAT HUD FHA AND WORLD ALLIANCE ON PAGE 54 55 ABSOUTLEY NO REVERCE MORTAGE WILL BE APROVED AND WILL NOT BE PERMITED TO RESEVE ENEY OF OUR PROUDUCTS AND MY MOM NEEDED TO FILE BANK RUPSEY BUT THE PREDATOR -EBBIE - OVET FO SECURITY ONE LENDING USED FORDGED DOUCMENTS AND USED COUNTERFITTED DOUCMENTS AND I HANDED ALL OF IT TO HER SAID YOU CANT GET REVERCE MORTAGE MY MOM ASKED ARE YOU SURE ITS OK SHE SAID DONT WORRY AND I HAD NO IDEA THAT THREE LENDERS STARTING WITH AFFIODIVIT OF DEATH 2001 CREATED AN ELIOOUSEN TO DEFROUD AND SELF FINICHAL BLOOD MONEY AND THEY SAY HOUSE NO DEBET AND SICK CONFUSED AND OVERMEDACATED AND FACTN THAT IF THEY READ AND WERE HONEST THAT LYDIAS ESTSTES OF GRANTORS AND SERVIVING GRANTRO TRUSTOR HEAR BYU KNOWEN AS TRUSTEE WITHOUT FUDICHAERY RESPONCIBILITY AND THE GRANTERS APPOINTED AND GAVE COMPLEAT CONTROL OD FUDICHARY AND DISPRUCE AND FOLLOW THE TRUST AGREMENTS ON 2/20/2001 THE ESTATES PERSONAL AND REAL PROPRTYS THE INTER ESTATES ADDED BUY TESTMENSTERY TRANSFER ADD TO KNOW AS THE TRUST TO BE PART OF THE TRUST AND HANDELD AS SO . AND DISPERCED ACORDING TO TRUST ARGREMENT AND ROB AND PAM SHELL ARE CO SERVIVING TRUSTEE BECOIES TRUST NAMES LYDIA SHELL TRUSTEE NO OTHER . CO EXCETOR WITH FULL EXECOURTYS REASPONCIBILITY BECOIES EXECITORS ARE CHOSEN TO TO PERSONALEY GIVING FULL TRUSTED VITAL PART OF THE PROGRAM FOLLOW WISHES OF THOES APOINTED AND THST ITS OUR REASPONCIBILITY TO FOLLOW USE OF HOME THAT TRUSTEE NOT PAY RENT AND SUSSER TRUSTEES LIVE WITH OUT RENTTHE REASON I HAD TO STYAND BUY NOT LAUNCH A BIG FIGHT MY SISTER HAS A ANUREASIM BEHIND HER HART AND BECOIES IF CHAMPION AND NORTHSTAR WILED AND THER WERE THRENTING CALLS AND LETTERS THAT SAID WE MUST CALL THEY HAVE BEEN TRYING TO GET INCONTACT AND THAT WE ARE GOWING TO INTO DEFAULT AND ITS A LIE IVE ASKED TO SEE THER PHONE LOAG LETTER LOAG AND LOAG OF STANDERD OPRETING PRECIDURES WE DO WHAT WE WANT WE CAN HOLD MAIL AND FILE DOCUMENTS THAT THEY DONT AND CANT SHOW WE ARE ABOVE CITIZENS RIGHTS AND NOT HAVE TO PROVIDE GARENTED SINGEL POINT OF CONTACT AND COMPLEAT COPPIE OF COPPIES OD DOCUMENTS AND THAT WE HAVE THE RIGHT TO SEE THE VERIFIDE DOCUMENTS AND THER PROFF ANDTO DROVIDE A FULL ACCOUNTING AND PROFF OF CLEAR TITLE AND CHAIN OF ASSINGMENTS AND CHANGES OF EVERY MOVEMENT OF THE ONERSHIP OF SECURITY OR MORTAGE
Posted by Robert p | Wednesday, May 28 2014 at 2:45AM ET
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