Multiple problems color the perception of the origination process
Borrowers with a problem during the mortgage origination process likely had multiple issues with their lender and a high percentage of those consumers felt the glitch was not resolved.
"Origination problems are not a small issue...one out of every six borrowers experiences a problem which, if not resolved, can have significant adverse consequences for the lender," Matt Lind, Stratmor Group senior partner, said in the consulting firm's monthly Insights report.
"Especially in a business environment where the borrower's experience is becoming the key source of competitive differentiation, no lender can afford to score relatively poorly in borrower satisfaction."
Of the 110,038 borrowers surveyed during 2017, 82% did not experience any problems during the process. Over three-quarters of the respondents that had a problem felt it was resolved to their satisfaction, while 23% said it was not resolved.
But multiple areas was the most-cited response as the reason for an issue (by 17% of the respondents), and over 43% of those that made this response said the problem was not resolved to their satisfaction.
"Clearly, borrowers experiencing multiple problems are soured beyond repair. While they must be attended to, if only to get their loans closed, these borrowers represent a big drag on overall satisfaction" with the mortgage originator, said Lind.
The application process — including the originator making multiple requests for documents — was the next most cited problem, at 13%, followed by problems at closing by nearly 11% and underwriting at 10%.
While rate problems were cited by over 2.5% of the respondents, nearly 38% of this group said the related trouble was not solved to their satisfaction. Communications problems were cited by nearly 8% of the respondents, but over 31% declared the snag unresolved. Fee issues were another area where a significant percentage of respondents said the problem was not resolved.