J.D. Power: Mortgage Customer Satisfaction Up, Thanks to Digital

Customer satisfaction with primary mortgage originators increased this year as digital origination channels play a more significant role in the process, said J.D. Power, Westlake, Calif.

The company’s 2018 U.S. Primary Mortgage Origination Satisfaction Study noted, however, despite a clear preference for digital interaction at several points in the mortgage origination process, personal interaction with a representative still plays a key role, particularly when it comes to following up after an initial inquiry.

And in case you were wondering: Quicken Loans, Detroit, ranked highest in customer satisfaction for the ninth consecutive year, although Fairway Independent Mortgage, Troy, Mich., and several credit unions gave Quicken some competition in that category.

“The mortgage marketplace is changing rapidly as traditional players and new digital-native entrants ramp up their digital and mobile offerings,” said John Cabell, Financial Services Practice Lead with J.D. Power. “While improved digital offerings are helping mortgage originators build customer satisfaction, it is important to find the right balance between digital, self-service offerings and personal interaction with a representative. Technology alone is not a magic bullet in this market; the key is knowing where to leverage it and where to layer in more traditional forms of one-on-one support.”

Key findings of the 2018 study:
–Overall satisfaction improves as digital plays larger role: Overall satisfaction with primary mortgage originators is up 10 points (on a 1,000-point scale) in 2018. This is driven in part by increased customer use of digital and mobile channels. On average, customers use 3.1 different channels during the mortgage process, with phone (72%), website (69%) and email (58%) being the most commonly used channels.

–Representatives still play major role in customer satisfaction: While usage of digital channels has increased, just 3% of mortgage customers exclusively rely on digital self-service channels in the origination process. In fact, overall satisfaction is highest among customers who spoke only with their lender in person or over the phone (871) when applying for a mortgage, followed by satisfaction among those who used a mix of personal and self-service tools (868). The study said the most important parts of the process in which representatives add the greatest value are in the follow-up contact after an initial inquiry and when confirming loan terms and payment.

–Speed of contact is critical driver of satisfaction: Satisfaction levels decline sharply for each day spent waiting after inquiry for contact from a lender. Overall satisfaction among customers who receive a contact within one day is 869. Satisfaction falls to 852 after two to five days and to 806 after six or more days. The inquiry channel with the fastest overall contact times (2.0 days, on average) is online via smartphone/tablet, followed by online via desktop (2.2 days). “Though not all customers use digital channels, those who do value speed of contact,” J.D. Power said.

–Quicken Loans ranks highest in mortgage origination satisfaction for a ninth consecutive year, with an 876 score. Fairway Independent Mortgage ranks second at 873 and Guild Mortgage Co. ranks third at 857. Mr. Cooper has the greatest year-over-year improvement among rank-eligible companies, increasing by 41 points from 2017. The industry average was 836.

–J.D. Power said two credit unions, USAA and Navy Federal Credit Union, scored highest (891 and 888, respectively) but were not rank-eligible because they do not meet study award criteria. Additionally, the study included, but did not rank, two dozen other mortgage companies. The list can be found at https://www.jdpower.com/resource/us-primary-mortgage-origination-satisfaction-study.

The study measures customer satisfaction with the mortgage origination experience in six factors: application/approval process; interaction; loan closing; loan offerings; onboarding; and problem resolution. The study is based on responses from 5,187 customers who originated a new mortgage or refinanced within the past 12 months.