Mortgage servicers that prioritize cost containment over customer satisfaction risk losing repeat business when borrowers refinance or buy a new home, according to the results of J.D. Power's latest mortgage servicing survey and rankings.
Investments in customer experience are often a low priority for servicers, particularly given that borrowers have little choice in who manages their loans. But, "the study clearly shows, however, that interacting with customers more efficiently — and more effectively — can reduce costs and increase profit for servicers regardless of the business model, while having the added bonus of improving satisfaction," said Craig Martin, senior director of the mortgage practice, in a press release.
In particular, high satisfaction leads to greater customer retention and low satisfaction results in consumers taking their other accounts elsewhere.
The industry average customer satisfaction score was 755 (on a scale of 1,000), up from 715 in the 2015 survey. This year there were 27 companies represented, up from 20 last year.
Low rates are expected to drive new home purchase and refinance activities. If a company's score is below 600 points, 63% of the consumers surveyed said they would switch mortgage companies in order to have a better customer service experience.
Approximately two-thirds said if a servicer has an overall satisfaction score of over 900 (which no company obtained on this year's survey) they would definitely refinance with that lender.
When it comes to the broader relationship with the customer for other products a servicer might offer, 27% of those surveyed said they closed or considered closing other accounts at that company if the overall satisfaction score was under 600.
The survey again found that consumers are looking for self-service options to answer their questions. Approximately 40% of the respondents said they went to the servicer's website to find help but instead ending up having to call the company to get their answer.
"Most servicers tend to focus on the complaints they receive, but the truly successful servicers get to the root causes of problems and take a more proactive approach. They realize better communication and self-service options can help their bottom line by reducing unnecessary calls," said Martin.
For the third consecutive year, Quicken Loans had the highest satisfaction score at 850; it was the only servicer in the top tier. However, two other servicers, which J.D. Power does not include in the general rankings because of the limited scope of their clientele actually scored higher: Navy Federal Credit Union got an 870, while USAA Federal Savings Bank (another institution that works with military families) scored 861.
Huntington National Bank, which was not ranked last year, was second with a score of 828, while Regions Mortgage, ranked eighth last year, moved up to third at 810.
The nation's largest servicer, Wells Fargo, ranked 12th this year, with a score of 768, but that was an improvement over last year's 737.
Among other large servicers, Chase ranked sixth with a score of 781 and Bank of America ranked 18th with a score of 741.
There were six servicers in the bottom tier, with Ocwen ranked 27th and a 650 score. The company swapped places with the Ditech Financial subsidiary of Walter Investment Management Corp. (last year using the Green Tree name), which scored 657. HSBC was next at 672, followed by Nationstar at 674, PHH at 713 and Freedom Mortgage at 714.
