STRATMOR: June Borrower Satisfaction Down Slightly
STRATMOR Group, Greenwood Village, Colo., said its National Borrower Satisfaction Index dropped slightly in June, but remained “remarkably high,” given the complexity of the transaction.
The Index inched down to 89 from April and May’s high of 90 (out of a possible 100). STATMOR attributed the decline to June’s sharp increase in origination volume (nearly 20 percent higher than April), which more than likely led to a corresponding decline in service levels.
STRATMOR Senior Partner Matt Lind said further satisfaction declines could be seen this summer as the high volume of purchase closings collides with back office summer vacation schedules at many lenders.
STRATMOR data also showed that when the mortgage originator attends the loan closing, the borrower’s level of satisfaction, likelihood to use the lender again, likelihood to recommend and to positively comment on social media all increased significantly. “Based on these findings, it appears that requiring retail originators to attend loan closings can be a very cost-effective approach to increasing borrower satisfaction, requiring virtually no capital investment,” Lind said.
STRATMOR also reported results from its Compensation Connection and Back Office Incentive Compensation Spotlight surveys, showing despite persistent rumors of high sign-up fees and large salaries, underwriter compensation has remained relatively constant for the past several years.
The survey said nearly one-fourth of respondents are allowing underwriters to work remotely, although independents are more than twice as likely to do so as banks (33 percent to 14 percent).
Additionally, 71 percent of respondents provide incentive-based compensation to back-office personnel (processors, underwriters, closers, post-closers and shippers). Of the 29 percent who do not, nearly half are considering or are in the process of implementing such plans, leading STRATMOR to believe that nearly 86 percent of lenders will offer incentive-based compensation to back-office personnel in the near future.
Lind said the results suggest that a balanced approach to incentive-based compensation is of key importance to lenders. “Despite rumors to the contrary, average underwriter compensation has remained relatively steady for the last several years, with only marginal upticks in some years which likely reflect standard merit increases,” he said. “We also see that companies are taking a balanced approach to underwriter incentives that rewards productivity but also emphasizes non-volume related factors. This is in contrast to incentive compensation plans for other back office personnel that emphasize throughput over non-volume related factors.”
Allowing underwriters to work remotely is a “less tangible” form of compensation that nevertheless carries significant value to underwriters and is a way for lenders to flexibly adjust underwriting capacity to match workload, Lind said. “The corporate culture and controls at banks, however, appear to limit this practice, which unfortunately may limit their ability to recruit underwriters who have become accustomed to working remotely,” he said.
