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Struggles with managing refinance volume and streamlining digital workflows have affected customer satisfaction with mortgage originators, according to a recent J.D. Power survey.
Overall satisfaction with mortgage originators was lower compared to last year, according to the J.D. Power 2021 U.S. Primary Mortgage Origination Satisfaction Study. With low interest rates and high home values continuing to boost mortgage activity this year after record volumes in 2020, J.D. Power said in a statement that efforts to streamline the loan process with one-size-fits-all digital workflows have eroded customer satisfaction.
“Mortgage originators have been working for years to create an effective and efficient origination process, primarily through digitization of the process and implementation of self-help tools, but the massive surge in volume has exposed some serious weaknesses in that approach,” Jim Houston, managing director of consumer lending and automotive finance intelligence at J.D. Power, said in the statement. “It’s not enough to provide consumers with electronic applications and digitized tools to streamline and expedite activities up to and including loan closing. Today’s mortgage customers expect personalized, highly customizable experiences that include the right mix of technology and personal interactions based on their unique needs and wants.”
The 2021 study measured overall customer satisfaction based on performance in loan offerings, the application and approval process, communication, and loan closing. The study ran from June through September and was based on responses from about 5,400 customers who originated a new mortgage or refinanced within the past 12 months.
According to the 2021 study, the industry average for overall satisfaction was 851 on a 1,000-point scale, down five points compared to 2020, driven largely by declines in satisfaction with the refinance process. Both bank and nonbank lenders saw declines in their scores across all areas of the study, J.D. Power said.
J.D. Power said that a combination of digital self-service and personal service was key for lenders to retain younger customers. The study found that among Generation Y – what J.D. Power refers to as those born between 1977 and 1994 – and Generation Z mortgage customers who used both live personal service and digital self-service channels during the application and approval process, 76 percent said they would definitely consider using the lender again for their next refinance. That rate fell more than 10 percentage points when only one of these two channels was used, J.D. Power said.
The study also found that 29 percent of mortgage customers had to interact with the lenders during the origination process using three channels: live personal service, digital self-service and traditional (mail or email) or texting. J.D. Power said this resulted in lower satisfaction and a perception of a longer timeline for the process.
“The industry challenge is not to go all digital or all live personal service, but to tailor the right communication to the right customer at the right time,” J.D. Power said.
Guild Mortgage ranked highest in J.D. Power’s study with a score of 884, followed by Rocket Mortgage (876) and Citi (875). Rocket Mortgage had held the top spot in the study for the previous 11 years.
