Finding the Best Mortgage Service
More than a third of all potential borrowers would be willing to pay a higher rate if the mortgage came with superior service, according to a new survey.
The poll by the Carlisle & Gallagher Consulting Group didn't say how much more the 34 percent were willing to pay. But it did find that the "Pay Mores" are a frustrated bunch.
More than half think the process is too slow. A third find it impossible to track the status of their loan application, an equal percentage say it is too difficult to talk with their lender, and a quarter don't believe the advice they receive.
All this tells Tom Mataconis, vice president of consulting for the firm based in Charlotte, N.C., that banks must do a better job to win market share. But it doesn't tell borrowers how they can determine which lenders offer the best service.
An obvious starting point is to ask your real estate agent. Agents know which lenders keep their promises and close quickly without incident. After all, their livelihoods depend on it.
Also quiz friends, co-workers and relatives about their experiences. People love to talk, good or bad.
Beyond that, prospective borrowers should look for several attributes that will help them find a responsive company or accessible loan officer.
For starters, look for a consistent point of contact. Federal regulators have already settled on this as a requirement for loan servicers -- the companies that collect payments, disburse funds to cover property taxes and homeowners insurance, and otherwise administer loans -- so why not one for borrowers?
"Many lenders have discovered that consumers appreciate a single contact, someone they can reach out to for help or support at any time," says Andy Crisenbery of the mortgage technology company eLynx.
At the same time, you may not want to be bothered during certain periods of the day. If that's the case, make certain your feelings are known, suggests David Lo, director of financial services at J.D. Power and Associates, the market research firm that judges customer satisfaction in various industries. If you want to be reached only by email or only by phone between 9 a.m. and 5 p.m., tell the lender.
Crisenbery also says you'll have a better experience if the lender has a way to get the necessary loan papers to you as quickly as possible. If you are old-fashioned, that might be by fax or overnight delivery. But if you are more hip, it could be via the Internet.
Many institutions are putting all the documents the borrower needs to review directly into an online portal, the eLynx vice president reports.
His company offers a product called eDelivery, which delivers documents by email "almost instantaneously" and which requires several layers of authentication, making it more secure than regular email.
At a recent Mortgage Bankers Association conference in Chicago, an eLynx competitor called LenderMobile launched an app for iPads (and, soon, for Android devices) that allows customers to fill in the standard 1003 application form and otherwise check on the status of their loans, all from their mobile device.
The lender also can set up the app to notify customers when rates hit a desired target or change enough to meaningfully impact monthly cost, either up or down.
The app "puts the entire process in the borrower's hands," vice president Lovina Worick says. "You can even take a picture of a required document and send it straight to the loan file."
At the same show, Kofax debuted software that allows lenders to not only snap photos of W-2s and other support documents with their smart devices but also to extract data from the photos and use it to populate loan applications, all from the kitchen table.
You'll also want to deal with a company that provides up-to-date status information. There's nothing worse than chasing down an unresponsive loan officer to make sure this document or that report has been received, or to find out whether underwriting has looked at the application.
"One complaint borrowers have with the industry relates to the lack of timely status updates," says Crisenbery. "By providing real-time updates, borrowers will know exactly what's happening with their loans."
Beyond technology, Lo at J.D. Power suggests picking a lender that promises to provide the closing documents prior to closing. That way, you'll have plenty of time to find any discrepancies between the initial quote and what's now on the closing sheet, and to have the loan officer explain the differences to your satisfaction.
Speaking of accurate closing costs, LendingTree, the online mortgage search engine, recently asked the 300 companies on its network which questions borrowers should be asking. The top answer: What are the total costs involved in the loan?
In that regard, shopping website MortgageMarvel.com now guarantees that the charges quoted by one of its lenders will be within $50 of actual charges. If they're not, it will pay borrowers up to $2,500.
"We believe it's important for consumers to understand and know these costs as early as they can in the mortgage application process," CEO Rick Allen says. "We've worked hard to make sure the closing fees they see on our site are accurate, and we're willing to stand behind them."
(Lew Sichelman has been covering real estate for more than 30 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance-industry publications. Readers can contact him at firstname.lastname@example.org.)
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