Last week, I wrote a self-indulgent column about how a single comment from me, reprinted in National Mortgage News, literally changed the face of the industry. Shortly after I came out in support of the fine folks at Fannie and Freddie, their federal regulator announced plans to prop up their efforts for the foreseeable future, changing our industry for 2014 and beyond.
I was joking, of course. It is very unlikely that my comments had any influence on Mel Watt, who, as far as I know, is not a regular reader of my column. After all, I’m sure he’s spending his time on position papers that go into much greater detail on the agencies, such as those produced by our friends at the MBA.
It’s OK. I can live with the disappointment of not being regularly read by our regulators, especially since some of my recent content has been pretty well accepted by those in the industry, specifically midsize to larger lenders. In fact, over the past week or so, I’ve been quite pleased by the response to one piece of work I recently completed, although I suspect it has more to do with the critical nature of the topic and even concern about the regulators than my powerful prose.
Over the past year or so, Stratmor has been doing some in-depth research into borrower perception of the mortgage process in an attempt to understand how lenders can measure their performance in meeting borrower expectations and also influence borrowers to take specific actions that may benefit their businesses. On this white paper, I worked with our senior partner, Matt Lind, who has more degrees from MIT than I have degrees. The exercise was a great learning experience, both for me and apparently for some of our readers. Let me explain.
The first thing I learned is that, while every lender will tell you they measure their customer satisfaction, there has not been a standardized method of measuring what borrowers really think about our process and no insight into what actions our borrowers may take after leaving the closing—with the exception of very frequently not working with the same lender again. When we started looking for a tool to reliably measure borrower satisfaction, we had to go outside of our industry to find one.
The second thing I learned was that mortgage borrowers are not passive consumers. If they are pleased, they will take actions that will absolutely improve the lender’s business. But when they are not (which is about 5%-10% of the time) they will tell others about their dissatisfaction. So, do you want that feedback directly, or would you rather have the customer tell the CFPB?
Perhaps most important was our finding that there are certain satisfaction drivers that, if understood, can allow lenders to solve satisfaction problems before they become complaints and influence satisfied borrowers to help a lender’s business. Here is the amazing part—since the paper came out, about two weeks ago, it has been downloaded by executives of 100 medium-sized and larger lenders ($500 million annual volume or more). Given that there are only about 500 lenders of that size in the business, that means that about 20% of the industry now has a better idea of what customer satisfaction means here.
One other thing that I learned in the process of contributing to this white paper project is that I am able to write longer pieces of material without the need to rely on jokes. For those of you who read me weekly in this space, you only get the 1,000 word versions and they usually are sprinkled with jokes and the occasional sarcastic comment. (I once had a colleague suggest to me that sarcasm was just veiled hostility. I replied that he was an idiot and that I was not hostile at all.)
All kidding aside, white papers don’t always get much respect in our industry, probably because so many are just veiled brochures, pitching products and services. This project, and the positive response it has received thus far, have shown me that a good topic, and a timely issue backed up by data, can bring an important issue into focus. Next week I will have some more perspective on trends in customer satisfaction over the last few months and insights into some findings that I found very surprising.
If you want to focus some attention on the customer experience in your shop, reach out to me and I’ll get you a copy of the paper. After all, satisfied customers are no joking matter.
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience.