Overall, borrowers are satisfied with their mortgage experience, however, lenders continue to face pressure from regulations and increased competition from non-traditional lenders, according to the J.D. Power 2015 U.S. Primary Mortgage Origination Satisfaction Study released Monday.
The study measures customer satisfaction with the mortgage experience across six factors, including application/approval process, interaction, loan closing, loan offerings, on boarding and problem resolution. Satisfaction is calculated on a 1,000-point scale.
In 2015, customer satisfaction with mortgage origination averaged a score of 793, an increase of 7 points from 2014. This growth was driven by a 22 point gain in the application and approval process factor, which was also influenced by improved perceptions of the speed of the loan process.
Satisfaction increases when loans close earlier than promised (866), compared to when loans close as expected (821) and when it takes longer than expected (658).
Links between speed and efficiency and overall customer satisfaction are particularly noteworthy, the J.D. Power study finds, especially in light of the TILA RESPA Integrated Disclosure regulation that went into effect in October.
This law has the potential to increase the mortgage timeline, J.D. Power finds, which poses a significant challenge for lenders when serving home buyers across all generations, but could be particularly challenging when dealing with Millennials (ages 18-34) who are technically savvy.
“While a lot of effort has been placed on ensuring compliance with new regulations, it is imperative that lenders improve their education and communication about the impact of these changes or risk losing customers,” said Craig Martin, director of the mortgage practice at J.D. Power, in a written statement.
Effective communication is one of the most important aspects of a satisfying mortgage experience, Martin added, especially if the process is taking longer than it has historically.
“As the Millennial home buyers continue to rise, lenders must be ready to meet their expectations,” he said. “This generation is highly digitally connected, so ongoing communication and transparency via the channels they prefer, particularly mobile, are vital.”
Among lenders, Quicken Loans ranked highest in the 2015 study, with a customer satisfaction index score of 850, an increase of 15 points from 2014.
The company was followed closely by Fifth Third Mortgage, which ranked second with a score of 812. Bank of American and BB&T tied at 811, respectively.
Written by Jason Oliva