Low Cost Means Better Service?
USAA Federal Savings Bank is not the biggest or best known mortgage servicer in the country, but other lenders might be able to learn something from USAA about how to treat customers right.
And that doesn't mean showering attention on them, according to a study by J.D. Power and Associates.
A recent customer survey by the firm gives USAA, a provider of insurance and financial services to members of the military, the industry's highest customer satisfaction ratings for mortgage servicing. The San Antonio-based financial provider has a widely dispersed client base and provides most of its services electronically.
Rockwell Clancy, executive director of the banking and mortgage practice at J.D. Power, told MSN that USAA benefits from having only one banking branch, so it does business remotely via telephone, website and mail. The company also has a strong service culture and a strong affinity with its military customer base.
Because the bank operates remotely, it is forced to make sure processes work right because it doesn't have the opportunity to "muddle through" problems with customers at branch offices. Other lenders that scored high on the J.D. Powers customer satisfaction survey were BB&T and Citizens Bank.
Not surprisingly, customers whose servicing rights were transferred after origination gave their loan servicer lower customer satisfaction marks than those whose loan remained with the original lender. But while servicing transfers cannot be avoided, Mr. Clancy said lenders can do more to reduce the friction that can create headaches when servicing is transferred to a new lender.
Among the frustrations that stick out in a consumers mind: getting a past-due notice from the new servicer because the setup of the account was not done right.
Another frequent problem is that homeowners receive a notice that there is no record of insurance coverage, just months after the borrower provided evidence of insurance for loan closing.
Mr. Clancy said that from a customer standpoint, it is important to avoid mistakes so that there is no need for fixes. Consumers have a high expectation that their lender will get it right the first time, he said. User-friendly notices regarding the possibility of a loan sale also help ease the transition, he said. But ultimately, the servicer has the most at stake when loans are sold.
"If there is a negative experience in transferring the loan, that negativity does not accrue to the people who originated the loan. That negativity accrues to the servicer," Mr. Clancy said. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com