A J.D. Power study recently found that relief efforts and quick adjustments to digital solutions during the pandemic earned mortgage servicers high levels of customer satisfaction.
According to the 2021 U.S. Primary Mortgage Servicer Satisfaction Study, industry-wide, mortgage servicers earned high levels of customer satisfaction during the pandemic, increasing “satisfaction by a significant six points this year,” on a 1,000-point scale. However, the study also found “that pandemic-driven goodwill belies a bigger set of customer experience challenges — particularly for bank-affiliated lenders.” According to the report, traditional banks are losing their edge over nonbank lenders as loan forbearance programs end and more normal customer interactions resume.
Other study findings include:
- Bank-affiliated servicers are starting to lose their edge to nonbanks: Most of the overall satisfaction increase was driven by nonbank servicers, which have seen a 17-point increase in satisfaction. Bank-affiliated servicers, which have historically outperformed nonbanks by a substantial margin, gained just four points in satisfaction this year.
- The forbearance lift will not last long: Overall satisfaction among at-risk customers has increased 15 points year-over-year, while satisfaction scores among low-risk customers declined one point. Satisfaction is highest in the study among those who participated in forbearance programs.
- Banks see satisfaction lift from non-mortgage services: Higher overall satisfaction scores for bank-affiliated servicers were inflated by non-mortgage services. Satisfaction scores among customers who also use their servicer’s bank products are 55 points higher than those with mortgage-only relationships.
- The need to expand engagement on digital, self-service channels is evident: While website usage increased five percentage points this year, there is still a perceived room for improvement with the online channel. Only 38 percent of customers said they found the desired information on their servicer’s website within the first two pages. When customers had to visit more than two pages, overall satisfaction declined 55 points. For customers who indicated they would switch if given the chance, their top reasons, “in addition to better rates, were, ‘better/improved service’ and ‘easy access to help myself to information about my loan.’”
“Mortgage servicer satisfaction was buoyed by the industry’s response to the pandemic, with some of the biggest gains in customer satisfaction being driven by at-risk and moderate-risk customers who participated in forbearance programs,” said Jim Houston, director of consumer lending intelligence at J.D. Power. “However, as we look at post-pandemic customer behaviors and responses of low-risk customers, we see that lift in satisfaction might be short-lived. In fact, despite the attention on relief programs, nearly one-fifth of current mortgage customers have had no interaction with their servicer during the past year. Mortgage servicers will really need to up their customer engagement games as the marketplace stabilizes.”
The study, based on responses from 8,507 customers who originated or refinanced more than 12 months, was fielded from March through May and measures customer satisfaction with the mortgage servicing experience in five factors: Customer interaction, communications, billing and payment process, escrow account administration and new customer orientation.
South Dakota Bankers Association President Karlton Adam noted mortgage servicers have extended hours and specifically set up appointments to help customers seeking to refinance and reduce their mortgage payments over the last 18 months. He does not see any changes to that trend either, following the Federal Reserve’s recent announcement that it would seek inflation at slightly above 2 percent until maximum employment is reached.