J.D. Power: Primary Loan Services Have Trust Issues with Customers

J.D. Power, Costa Mesa, Calif., said mortgage servicers havesome of the lowest customer service rankings in 2018 among service industries.

The company’s 2019 U.S. Primary Mortgage Servicer Satisfaction Study found the industry average for overall satisfaction with mortgage servicers is 777 (on a 1,000-point scale), which sits just below life insurance (779) and just above health plans (712) at the bottom of the industries studied. The average Net Promoter Scores for primary mortgage servicers is 16, one of the lowest of any industry the company studied.

However, the study said several mortgage servicers did quite well. Quicken Loans ranked highest among servicers for the sixth consecutive year, with a score of 878. Regions Mortgage (848) ranked second and Guild Mortgage (828) ranked third.

The study (https://www.jdpower.com/business/resource/us-primary-mortgage-servicer-satisfaction-study) noted mortgage servicers “occupy a unique slice of the consumer finance marketplace” in which many of their customers do not select them but are acquired when the servicers purchase loans in the secondary market. The involuntary nature of this relationship, combined with an industry-wide focus on efficiency and cost controls, resulted low customer satisfaction.

“Mortgage servicers are really missing an opportunity to build the kind of goodwill with their customers that has proven to translate directly to increased advocacy and repeat business,” said John Cabell, Director of Wealth and Lending Intelligence with J.D. Power. “The industry’s laser focus on lowering costs, managing regulatory compliance and minimizing delinquencies has come at the expense of customer experience. It is negatively affecting customer trust in their brands.”

Other key study findings:

—Trust gap carries consequences: More than two-thirds (70%) of customers do not have complete trust in their primary mortgage servicer; accordingly, these customers also have the lowest customer satisfaction and NPS scores. However, for the 30% of customers who “completely trust” their mortgage servicer, customer satisfaction scores average 256 points higher, NPS is 69 points higher and customers are three times more likely to reuse the company for the purchase of a new home.

—Digital tools not keeping pace: Nearly 60% of customers are accessing information via their mortgage servicer’s website; just 31% are accessing information via mobile, both of which lag other financial sectors in retail banking. “Despite relatively low usage, overall satisfaction is highest among customers who use digital self-service channels,” the study said. Digital use varies considerably by servicer, with best-in-class brands showing utilization rates 20% higher than the industry average for key functions such as checking alerts and messages and reviewing FAQs.

—Transferred customers–earning goodwill with a unique customer type: Transferred customers seek the same basic customer experience criteria as those who actively choose a mortgage servicer, yet their satisfaction scores are lower and they have a significantly higher incidence of problems with payment and escrow accounts. The study said 54% of first-time home buyers say they are confused, angry or irritated when transferred. This phenomenon spotlights the unique communications and customer experience challenges mortgage servicers still need to address with transferred customers.