Spokane Journal of Business

Customer satisfaction with mortgage lenders increases

J.D. Power survey shows marks reaching highest point in past six years

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Overall customer satisfaction with mortgage lenders has reached its highest level in the past six years, says the J.D. Power & Associates 2012 U.S. Primary Mortgage Origination Satisfaction Study released late last year.

Overall customer satisfaction is 761 (on a 1,000-point scale) this year, up from 747 in 2011 and 734 in 2010.

"Given the recent challenges across financial services, the highest-performing lenders in the 2012 study have reduced customer uncertainty and apprehension with greater transparency and communication regarding what to expect in the origination process," says Craig Martin, director of the mortgage practice at J.D. Power & Associates. "This increase in satisfaction is particularly impressive given the increasingly expanded origination timelines during the past year."

The study finds that steady improvements related to transparency and communication are driving much of the increase in customer satisfaction. During the past three years, lenders have improved in three areas: explaining loan options and ensuring customers understand them; following up with customers in a timely manner after they complete their application; and proactively updating customers on the status of their application.

Further, there's a strong relationship between satisfaction with the origination process and the rates of customer consideration and usage of the same lender for refinancing. Among loan customers who refinanced in 2012, only 40 percent cite price as their main reason for selecting their lender. Other reasons commonly cited include an existing relationship, previously being a customer, and referrals.

"On the surface, most would assume that the interest rate is the primary factor in the decision-making process," Martin said. "However, lenders that enjoy high levels of repeat business are those that typically deliver high levels of satisfaction and don't necessarily offer the lowest rates. From the perspective of customers, peace of mind in the loan-origination process is critically important, and selecting a lender with a slightly higher rate, but that provides superior customer service, may be worth the few extra dollars in their monthly payment."

The2012 U.S. Primary Mortgage Origination Satisfaction Studyis based on responses from more than 3,500 customers who originated a new mortgage. Fielded between July 31 and Aug. 27, 2012, the study measures customer satisfaction in four factors: application/approval process; loan representative; closing; and contact.

Quicken Loans ranks highest among primary mortgage lenders for the third consecutive year, with a score of 817, and performs particularly well in all four factors. Branch Banking & Trust Co. follows in the rankings with a score of 791, while U.S. Bank ranks third with a score of 784.

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