According to J.D. Power in Troy, despite record new loan originations in 2020, mortgage originators have struggled to manage surging refinancing volume.
In addition, while mortgage firms have undertaken efforts to streamline the new issuance of loans with a one-size-fits-all digital workflow, the offering has caused customer satisfaction to take a significant hit.
“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,” says Jim Houston, managing director of consumer lending and automotive finance intelligence at J.D. Power.
“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.”
Overall customer satisfaction fell across most segments, with primary originators overall scores dropping five points (on a 1,000-point scale), driven largely by declines in satisfaction with the refinancing process. Both banks and non-banks have seen these declines across all segments.
Another finding from the report is digital self-service combined with live personal service is the key to retention of younger customers. More the three-quarters of generation Y and Z mortgage customers who used both live personal service and digital self-service channels during the process said they “definitely will” consider their lender for their next refinance. The rate falls more than 10 percentage points when only one channel is used.
Among this generation of customers, the perceived timeline from application start to approval is shortest when live personal service and digital self-service are combined — 12.7 days on average. When tradition/text communication methods (mail, email, texts) are added, the perceived timeline increases to an average of 21.5 days.
Nearly 30 percent of mortgage customers indicate using all three interaction channels during their loan origination. This results in lower satisfaction and perception of lengthier timelines than when the optimal combinations are used, meaning the challenge isn’t going all digital, but finding the right mix of channels.
Guild Mortgage ranked the highest in mortgage origination satisfaction with a score of 884, with Rocket Mortgage (876) and Citi (875) rounding out the top three.
The 2021 U.S. Primary Mortgage Origination Satisfaction Study measures overall customer satisfaction based on performance in four factors (in alphabetical order): application/approval process; communication; loan closing; and loan offering. The study was fielded from June to September 2021 and is based on responses from 5,414 customers who originated a new mortgage or refinanced within the past 12 months.
For more information about the U.S. Primary Mortgage Origination Satisfaction Study, click here.