Originator customer satisfaction rises, but tech issues persist

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While customer satisfaction with mortgage originators has improved overall, increased problems in communications and the use of automated tools have been masked by low interest rates, J.D. Power said.

"It's been a complicated year for the mortgage industry," Jim Houston, managing director of consumer lending and automotive finance intelligence at J.D. Power, said in a press release. "Between surging customer volumes on the origination side, an influx of customer inquiries on the servicing side and a workforce that has been completely displaced by the pandemic, resources have been stretched to their limits."

"That strain is showing up in slower loan processing times, missed opportunities to communicate and unreliable self-service tools. While some of these shortcomings may have been opportunities in prior years, current market conditions and customer satisfaction metrics indicate that mortgage originators need to look hard at fixing them if they want to stay viable," Houston said.

Ironically, the 2019 originator survey found that a higher volume of business reduced customer service satisfaction.

Because of low interest rates, 2020 is likely to end up as the best year ever in terms of origination volume, according to Fannie Mae's latest projection.

The overall industry average score increased to 856 from 850 in 2019. Rocket Mortgage by Quicken Loans remains at the top for the 11th consecutive year, at 883, up three points from a year ago, followed by Bank of America and Chase both at 860.

Bank of America's score was 17-point improvement over their 2019 number, while for Chase it is a 10 point gain.

"J.D. Power's recognition is further confirmation we are consistently meeting our clients' needs," Jay Farner, its CEO, said in a separate press release. "This accolade comes after we experienced record-breaking loan volume in the first two quarters of 2020."

Rocket also scored highest in the J.D. Power mortgage servicer study released in July.

Last year's Nos. 2 and 3 ranked originators, Fairway Independent Mortgage and Guild Mortgage were not in this year's rankings because these companies did not generate enough consumer responses.

At the other end of the 17 mortgage originators ranked this year was Penny Mac, ranked lowest at 773, followed by Freedom Mortgage at 817 and Flagstar at 821.

Also scored but not ranked because they only serve veterans, current service members and their families, were USAA at 887, Veterans United at 873 and Navy Federal Credit Union at 867.

Amid social distancing measures, the number of borrowers using self-service channels for loan applications and approvals increased by five percentage points, while a corresponding decrease was tracked in in-person, telephone and email contact with customers.

But increased use of self-service portals did not correlate to higher satisfaction scores with them. Borrower satisfaction with those tools was down 10 points in this year's survey compared with 2019.

Frequency of communications from the lender remained a key concern of applicants, as it was one year ago.

"The more lenders communicate with customers during the application, closing and onboarding processes, the more customer satisfaction improves," J.D. Power said. "Customers with the highest level of satisfaction (929) receive daily communications from their lender. However, this occurs just 11% of the time."

J.D. Power conducted the study between June and August and the results are based on responses from 4,300 customers who originated a purchase or refinance mortgage within the past 12 months.

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