J.D. Power: Satisfaction in self-service channels dips

While customers are largely content with primary mortgage originators this year, those high marks may be cloaking some fundamental issues that could grow into larger problems down the line, according to J.D. Power’s 2020 U.S. Primary Mortgage Origination Satisfaction Study.

Overall customer satisfaction with their primary mortgage originators increased six points in 2020, J.D. Power revealed. On a 1,000-point scale, the industry average score on J.D. Power’s Customer Satisfaction Index was 856; Rocket Mortgage by Quicken Loans scored highest among brands for the 11th consecutive year with a score of 883.

Those high customer satisfaction scores, however, received a big boost this year from historically low interest rates, J.D. Power said. The competitive rate environment masked the decline of satisfaction in several key client service categories, such as loan processing time, ease of self-service interaction and helpfulness of customer service.

“It’s been a complicated year for the mortgage industry,” said Jim Houston, managing director of consumer lending and automotive finance intelligence at J.D. Power. “Between surging customer volumes on the origination side, an influx of customer inquiries on the servicing side and a workforce that has been completely displaced by the pandemic, resources have been stretched to their limits.

“That strain is showing up in slower loan processing times, missed opportunities to communicate and unreliable self-service tools. While some of these shortcomings may have been opportunities in prior years, current market conditions and customer satisfaction metrics indicate that mortgage originators need to look hard at fixing them if they want to stay viable.”

Notably, satisfaction with the application and approval process among customers using self-service digital channels dropped by 10 points in 2020. The significant decline came as the number of customers using self-service channels for loan applications and approvals grew five percentage points. Meanwhile, the number of customers using personal service channels (in-person, phone and email) fell five percentage points, signaling a need for the mortgage industry to address a crucial shortcoming in a growing service channel.

Meanwhile, as refinancing boomed in 2020, the average refi transaction took 42 days from application to closing. That’s up from 39 days in 2019. Correspondingly, customer satisfaction with the timeliness of the refi application process and length from approval to closing decreased year over year.

Finally, just as J.D. Power’s Mortgage Servicer Satisfaction Study found in July, frequency of communication remains a crucial cog in earning high satisfaction scores. Simply put, the more lenders communicate with customers during every stage of the loan process, the more satisfaction improves. Customers who reported the highest level of satisfaction (929) with their originators received daily communications — a rate of communication that was reported just 11% of the time.