Mortgage Lenders Benefit From Helping Customers Navigate Tough Housing Market, J.D. Power Finds

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Persistently high rates combined with rising house prices have put a strain on mortgage customers, buts some lenders have turned those challenges into opportunity and earned high marks for customer satisfaction, according to J.D. Power, Troy, Mich.

J.D. Power’s 2024 U.S. Mortgage Origination Satisfaction Study noted the variability in rates and higher costs for buyers increase the importance of understanding consumers’ individual situations.

“Consistently, we’re seeing that lenders that play an active advisory role in helping their clients navigate the current market are earning significantly higher customer satisfaction, loyalty and advocacy scores than those that are treating mortgage lending as a transactional process,” said Bruce Gehrke, senior director of wealth and lending intelligence at J.D. Power.

Key findings of the 2024 study include:

Overall satisfaction declines following sharp increase in 2023: Overall customer satisfaction with mortgage lenders is 727 (on a 1,000-point scale), down 3 points from a year ago, when mortgage customer satisfaction surged 14 points year over year.

In the past year, mortgage lenders have noticeably trimmed their staffing levels, making it more challenging to deliver the same level of highly personalized customer service that drove the gains in customer satisfaction a year ago, the report noted.

Interpersonal relationships with local brand representatives are critical to satisfaction: The only factor gaining in this year’s study was people, which rose by a single point. The factors showing the biggest year-over-year declines in customer satisfaction are digital (-8 points), communication (-5) and loan offering met my needs (-5).

In fact, when local brand representatives are directly involved in the mortgage origination process, overall satisfaction rises 40 points, J.D. Power said.

‘Lender as advisor’ becomes key to navigating a tough market: Lenders that actively advise clients throughout the lending process drive significantly higher customer satisfaction scores, the report said. “The satisfaction score for trust among borrowers who strongly rely on the lender’s expertise to get through the borrowing process is 133 points higher than among those borrowers who do not strongly rely on the lender’s expertise.”

Timing is everything/earlier is better: Theoverall satisfaction rate was 41 points higher when lenders engage early with customers, connecting with them when they are first thinking about purchasing a home, compared with overall satisfaction when lenders get involved once customers are actively shopping. Satisfaction was 107 points lower when lenders got involved at the time customers are getting ready to apply for a mortgage.

Study Rankings: Prosperity Home Mortgage ranked highest in mortgage origination satisfaction, with a score of 772. Movement Mortgage (761) ranked second and Bank of America (760) ranked third.