Coronavirus amplified existing customer service issues: J.D. Power

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J.D. Power's 2020 mortgage servicer customer survey and rankings reflects the vast impact of the coronavirus pandemic, but surprisingly, not in an entirely negative way.

For the industry as a whole, the average satisfaction score rose slightly to 781 from 777 in the 2019 survey.

Part of that increase comes from a year-over-year rise in the trust consumers have for their servicer. That particular metric improved 12% to 770 from 762 a year ago.

"Lenders have become more attuned with how consumers are thinking about and … [feeling] about them, especially in circumstances that are not optimal," said Jim Houston, director of consumer lending intelligence at J.D. Power.

While the servicers at the top and the bottom of the survey's ranking remained the same, there was some compression between their respective scores.

Quicken Loans remained the mortgage servicer with the highest satisfaction score at 854, but that is down from 878 one year prior.

At the bottom of the survey, PHH, which last year was known as Ocwen (the company changed branding after a merger), saw a 10-point year-over-year increase in its score, to 667.

The differentiator between the highest and lowest, Houston said, is not that the servicer doesn't offer something, "it is the nuances within what they do. Within the processes built there are nuances more consumer-friendly than others."

Large gainers included Provident Funding, up 37 points year-over-year to 790, U.S. Bank, up 33 points to 802, and TD Bank, up 25 points to 815.

Houston said most lenders whose scores increased from 2019 made their gains because of improved proactive communications and customer interactions.

Among the largest bank servicers, Chase scored 810, Bank of America was at 804 and Wells Fargo at 773.

The 2020 survey's respondents placed more of an emphasis on the quality of digital interactions and other instances in which consumers are engaging their servicer "outside of the normal channels," Houston said. The survey also tracked how often customers were hearing from their servicer.

The survey was conducted over a six-week period starting March 16, from when the shelter-in-place orders began to when the government started offering various forms of relief, including forbearances.

The survey found that various conditions related to the coronavirus — low interest rates, record-high unemployment and increased loan delinquencies — drove more website utilization, long wait times with call centers and very little proactive communication.

All of that can drag down overall customer satisfaction scores, Houston said.

"The COVID-19 pandemic has really amplified the gaps in customer satisfaction, digital experience and call center experience that have been a challenge for mortgage servicers for some time," said Houston.

"At a time when the need for streamlined, effective digital guidance and proactive outreach and counsel is more important than ever, mortgage customers aren't finding the answers they need online, pushing them onto long customer service queues in call centers and leaving them to hunt for answers on how best to address their challenges," he added.

The first Mortgage Bankers Association's forbearance survey covering the period ended April 1 revealed the issues that servicer call centers had dealing with the flood of inquiries for relief.

Average hold times were 17.5 minutes, with an abandonment rate of 25%.

Things have improved greatly since then. As of July 19, the average speed to answer a call was 2.6 minutes and the abandonment rate was 6.8%.

The study notes, however, that consumers are not comparing the website experience with what other servicers are offering. Rather, they are making the comparison with all the other websites they do business with, such as Amazon or the utilities they have accounts with, Houston said.

Consumers want to go to their servicer's website, find the information they desire in less than two clicks and be able to understand what their options are at that point rather than having to contact an agent, he said.

More than three-fifths (62%) of those surveyed said they visited their lender's website as their first source of information. But only 28% said online is the most effective way for them to resolve an issue.

Among those who couldn't resolve their issues on the lender's website, 45% said they were satisfied only after picking up the phone to speak with a representative.

But that is when they can actually speak to someone. Just under 20% said that it was not easy to contact a live agent on the telephone.

Proactive communications go a long way to increase satisfaction, but consumers reach a point where it is too much.

Customers who receive three or four proactive communications per year from the servicer have the highest levels of overall satisfaction. Yet, only 8% of customers indicate receiving this level of communication.

At the same time, 40% of respondents stated that they've had no proactive communication from their lender. Meanwhile 29% say they've received 11 or more communications. Too few or too many communications cause satisfaction scores to decline, the survey found.

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Customer experience Default management Refinance Mortgage technology Coronavirus JD Power Marketing Quicken Loans Ocwen Financial Digital Mortgage 2020