BB&T Remains atop Servicer Satisfaction List
Westlake Village, CA-Overall customer satisfaction with their mortgage servicer has dropped for the second straight year, according to J.D. Power and Associates, but primarily prime mortgage companies continue to score well. For the second year in a row, BB&T received the highest marks from customers, according to J.D. Power.
On a 1,000-point scale, overall customer satisfaction with the company servicing their home loan dropped 14 points to 784 in this year's survey. The recent high score came in 2006, when overall satisfaction measured 812. Ironically, the decline in customer satisfaction comes at a time when data from the Mortgage Bankers Association show that lenders are spending more money to service each loan.
Increased billing errors, more service "hand offs" and a larger number of customers making late payments all contributed to lower satisfaction levels, according to J.D. Power.
The survey measures customer satisfaction with billing, payments, contact with the lender and annual account administration.
For most customers, their mortgage servicer is akin to a utility company. All they really want is a "friction-free experience," according to J.D. Power. If they run into bumps in the road that require customers to spend time asking questions or solving problems, that results in lower satisfaction, especially if customers have to call their servicer more than once to get something resolved.
Once again, the J.D. Power study found that increasing customer adoption of electronic billing and payments is key to raising customer satisfaction rankings. And adoption of electronic billing is rising. Fifty-six percent of respondents in the survey said they make payments through an automatic deduction or website, compared with 36% who make payments by mail. Two years earlier, just 49% of customers made payments electronically, while 42% paid via mail.
"Once you get people on electronic billing, there are pretty big cost savings," said Tim Ryan, a senior director at J.D. Power. He said additional savings can be gleaned by lenders that extend electronic payment processing throughout the flow of funds.
"Clearly it is in the mortgage company's best interest to get those funds moving as fast as possible."
Offering electronic payment options and driving consumer acceptance are of course two different things, and Mr. Ryan urges lenders to evaluate their systems to eliminate possible roadblocks to consumer adoption. "They just are not making it as easy for people as you might think," he said.
Kelly Stallard, a senior research director at J.D. Power, said lenders have been slower to adopt electronic billing than payment service because billing statements are often used for cross-selling purposes. But in today's environment, everything is on the table.
"I'm sure they are looking at everything very hard in terms of cost savings," she said.
Branch Banking and Trust ranked as the lender with the highest customer satisfaction ranking for loan servicing, scoring 839 on the 1,000-point scale. Other leaders in customer satisfaction were SunTrust Mortgage, with a score of 825, and Wells Fargo at 813. Not surprisingly, given the high-touch nature of their business, lenders that specialize in managing subprime mortgage portfolios had lower customer satisfaction ratings. Also, companies that have received a large volume of negative news coverage, such as Countrywide and IndyMac, also scored lower.
Tim Dale, manager of BB&T's mortgage servicing unit, said he's pleased that the company has topped the customer satisfaction survey for two consecutive years.
"More and more home buyers in our footprint, who in some cases have seen their lenders go out of business, have turned to BB&T because they realize there's no subprime turmoil or credit crunch here," he said.
BB&T, based in Greenville, S.C., services nearly 386,000 loans with outstanding principal of $57 billion. The company employs 1,350 people in its mortgage unit.