Do Lenders Spend Too Much Time With At-risk Borrowers?

J.D. Power 2015 satisfaction study ranks U.S. Primary Mortgage Servicers.

WESTLAKE VILLAGE, Calif. – July 31, 2015 – According to the just-released J.D. Power 2015 U.S. Primary Mortgage Servicer Satisfaction Study, mortgage servicers spend a disproportionate amount of time and resources on at-risk customers compared with customers who are current with their payment.

The study, redesigned in 2015, measures customer satisfaction with the mortgage servicing experience in six factors: new customer orientation; billing and payment process; escrow account administration; interaction; mortgage fees; and communications. Satisfaction is calculated on a 1,000-point scale.

At-risk customers – those currently behind in their mortgage payments or concerned about keeping current during the next year – represented 15 percent of the survey respondent pool. Despite being a relatively small percentage of the total population, this group has been a primary focus of regulatory agencies such as the Consumer Financial Protection Bureau (CFPB) and the Government Sponsored Enterprises – Fannie Mae and Freddie Mac (GSEs) – that own or guarantee the majority of conforming home loans.

Mortgage servicers consider their primary "customers" to be the owner of the loan (i.e., GSEs and Investors) rather than the end borrower, who has limited power to decide which mortgage company services their loan.

"Bank mortgage servicers' desire to retain and expand the broader relationship with the borrower has driven some improvement in customer service," says Craig Martin, director of the mortgage practice at J.D. Power. However, "non-bank servicers have had less business incentive to improve the experience' as their focus is on keeping borrowers paying their mortgage, not on delivering a better relationship."

As a result, servicers spend a disproportionate amount of time and resources on at-risk customers, and not on efforts to improve the experience for the majority of customers, such as website upgrades, the study concludes. When customers can resolve an issue entirely on their servicer's website, satisfaction is 765, compared with 650 when they can't.

When customers can't resolve their issue online, 67 percent ultimately turn to a live agent, which increases both the cost and the negative impact on satisfaction.

An additional 14 percent of customers give up trying to resolve their issue with the company altogether, which might give them the impetus to turn to the CFPB or other regulatory agencies.

"A lot of time and resources have been spent on the live representative interaction to help distressed borrowers. While improvement is needed, the majority of mortgage customers haven't seen a lot of meaningful changes in their experience," says Martin.

Overall customer satisfaction index rankings (1,000-point scale)

• Quicken Loans, Inc.: 834
• Citizens: 768
• Capital One: 742
• Fifth Third Mortgage: 740
• U.S. Bank: 739
• Wells Fargo Home Mortgage: 737
• BB&T (Branch Banking & Trust Co.): 735
• Regions Mortgage: 733
• Bank of America: 732
• Chase: 730
• SunTrust Mortgage: 727
• Industry Average: 718
• PennyMac: 710
• PNC Mortgage: 710
• CitiMortgage: 709
• Flagstar Bank: 709
• M & T Mortgage: 706
• Central Mortgage Company: 704
• Nationstar Mortgage: 646
• Ocwen Loan Servicing: 608
• Green Tree Servicing: 601

USAA and the Navy Federal Credit Union weren't ranked because they didn't meet the study award criteria.

© 2015 Florida Realtors®  All rights reserved. Reprinted with permission.