They cut off my water on April Fools' Day. I found out when my wife got home from yoga (hot yoga!) and was craving a shower only to find no water. At first, she figured it was my way of doing a very funny (not so much) joke for April Fools' Day.
But I had nothing to do with it, or at least nothing to do with the actual turning off of the water. It is possible that I was responsible for not setting up automatic bill payment, but I’m taking the fifth on that. Instead, I was left defending myself against a not happy wife who needed a shower and assumed I was to blame for her not getting one.
I reminded her that we have a pool in the backyard and a public shower just around the corner on Lauderdale Beach. These arguments, though logical, did not help my case. So, now I was mad at that water company for cutting me off.
What do my marital negotiations and lack of indoor plumbing have to do with the mortgage industry? Well, in my world, everything has to do with mortgage.
First, like any good borrower, I was mad at being so inconvenienced and immediately called the utility company for relief. I was informed that I had not paid the bill since January. I informed them that I was only kidding about that in honor of April Fools' Day. They were not amused and apparently expect me to pay every month. Always quick on my feet, I remedied the situation by making a payment with my credit card for which I received their promise to restore my water service.
Now, here is the mortgage analogy and how it has to do with the other big news on April 1 regarding the CFPB and its latest report on customer complaints. Apparently, there are a lot of folks like me out there that get really mad at what happens to them when they don’t pay their bills. In fact, the CFPB report for full year 2013 shows that there were over 160,000 complaints to the bureau from homeowners, of which 60,000 were complaints about the mortgage process.
That means that mortgage, once again, is leading the pack of financial service entities that annoy consumers! Of course, the CFPB only just started paying attention to payday lending, but that is a different issue (In fact, maybe I could have gotten a payday loan to cover my water bill and then my wife would still be talking to me). In any case, customers under stress get upset and if they are not handled correctly, they submit complaints.
Now I can tell you that the municipal water authority in Fort Lauderdale didn’t really seem all that concerned with my customer satisfaction until I read them my credit card number. But then, as long as the water they sell is potable, they don’t have a federal regulator looking over their shoulder to see how happy their customers are—much less launching a nice website where unhappy customers can share their anger with the world and name names while remaining completely anonymous (except, perhaps, to the NSA). However, that is the situation we face in the mortgage industry and so it behooves us to pay attention to customer satisfaction, even when they don’t pay.
In our industry today, according to the CFPB, there are over 50,000 borrowers who are having trouble paying their mortgages and are pretty darned mad about it. And so, probably, are their wives. We know this because they’re filing complaints with the Bureau. Would these borrowers still be mad if they were offered a clear direction as to what their options for payment are? We don’t know because, according to the Office of Mortgage Settlement Oversight, mortgage loan servicers still aren’t doing a good enough job of communicating this information to the borrowers in their portfolio.
Last year, over 10,000 mortgage customers complained about the origination process. These are folks that were so unhappy after closing that they sought remedy from a government agency. How much more effective would it have been if the president of the mortgage company had sent them an email right after closing and asked their opinion on the process? I can tell you because we run such a program at Stratmor. The answer is a lot!
We have found in our survey process that 5% to 10% of mortgage customers who were in the mortgage process during 4Q 2013 were not satisfied. That is during a period of lower volume and faster turn times. That may seem a small number, but these are the people who can trash you to referral sources and business partners. You can bet they won’t be coming back to you for their next loan. And yet, when a dissatisfied customer is approached and the problem rectified or remedied, they don’t become quietly satisfied customers, they become referral sources and repeat customers.
Sure, I was sort of annoyed that the water company cut me off for not paying a $100 water bill and apparently never even called me to warn me, until I found out that they did try to call me. It turns out that the utility did place a call to my house, but used my home number, which we never answer.
This speaks to a marketing issue we face in our industry that I often write about regarding how 85% of consumers either don’t have a listed number or are on a do-not-call list. I am one of the 85%. This is why a full range of contact options are better, and why marketing campaigns are so much more effective when they combine phone, email, direct mail and even social media outreach.
Believe me, if someone had sent me an email warning me that my wife was about to lose her ability to take a shower and I knew she was on her way home from hot yoga, I would have paid immediately. A Facebook post would have worked, too, maybe with a little emoticon of a showering yogi or a smiling wife. That would have gotten my attention. But try to tell a utility company to take customer satisfaction and effective customer communication seriously. It’s like talking to a mortgage company.
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience.