J.D. Power and Associates Reports: Although Borrowers Say Their Primary Mortgage Lenders Are More Flexible About Late Payments, Mortgage Customers Still Believe Lenders are Generally Less Accommodating Than They Could Be
BB&T Ranks Highest in Customer Satisfaction with Primary Mortgage Services
WESTLAKE VILLAGE, Calif., Aug. 1 /PRNewswire/ — Amid the turmoil in the housing market and mortgage markets, mortgage customers who report making at least one late payment in the past 12 months indicate that lenders are showing some flexibility in scheduling late payments, but tend to be less understanding and accommodating of their circumstances when compared to 2006, according to the J.D. Power and Associates 2007 Primary Mortgage Servicer Study(SM) released today.
Credit, Loan Size or Loan To Value – Do NOT Matter
The study measures customer satisfaction with the process of servicing a loan based on four primary areas: the administration of the customer’s account; the billing process; the payment process; and the process of contacting the mortgage servicer.
The study finds that while borrowers who have made late payments indicate their lenders are slightly more flexible in scheduling payments, customer ratings for the ability of lenders to understand their specific circumstances and their willingness to work with them declined from the 2006 study.
“Despite lenders being flexible with late payment situations, customers still feel as if their mortgage servicer is being less considerate of their specific circumstances,” said Tim Ryan, senior research director of the finance and insurance practice at J.D. Power and Associates. “It is mutually beneficial for both borrower and lender to work through these difficult time periods, and lenders can support the majority of these customers by being even more considerate of their situation. These circumstances often lead to the development of valuable, regular-paying customers.”
BB&T (Branch Banking and Trust) ranks highest in overall customer satisfaction with a score of 860 on a 1,000-point scale. M & T Mortgage follows in the rankings with 828 and Citizens Bank ranks third overall with a score of 825. These lenders all perform particularly well in keeping billing statement error rates lower than the industry average; providing a wide range of options for making payments; providing flexibility when scheduling electronic payments; designing and/or using automated phone systems that address customer needs; and handling customer contacts quickly and efficiently.
USAA, a financial services provider open only to the U.S. military community and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.
The study finds that there are considerable financial benefits for lenders in delivering a highly satisfying customer experience, including increased referrals and higher customer retention rates-which is the percentage of customers who pay off a loan and then refinance or take out a new mortgage with their current lender. Specifically, doubling the rate of customer retention from the industry average can result in an increase of nearly 3 percent in mortgage servicing valuations, or approximately $38 million for lenders with a $100 billion portfolio.
“In addition to the benefit of increasing servicing right valuations, moving customers to high commitment levels can triple the number of recommendations, almost double the number of additional products that the customer utilizes and reduce marketing costs for generating new business,” said Ryan. “To achieve higher retention rates, lenders can first and foremost enhance the billing and payment process to make it more convenient, and dramatically reduce errors through systems such as e-mail notifications and automatic payments.”
The study also finds that customers who say they “definitely will refinance” with their current lender are much more likely to make monthly payments via the Automated Clearing House (ACH) method, which allows the lender to take payments directly from the customer’s bank account. ACH can eliminate issues with lost, late and misapplied payments, which all negatively impact satisfaction. In addition, the elimination of high-impact errors — particularly, the mismanagement of tax and insurance escrow accounts and payments — and the prompt and precise resolution of problems can directly and positively impact satisfaction.
The 2007 Primary Mortgage Servicer Study is based on responses from 11,481 home owners regarding their experiences with their primary mortgage servicer. The study was fielded in three waves in November 2006, February 2007 and May 2007.
For more information on customer satisfaction with home mortgage providers, visit JDPower.com.
Overall Primary Mortgage Servicer Satisfaction Ranking
(Based on a 1,000-point scale)
BB&T (Branch Banking and Trust) 860
M & T Mortgage 828
Citizens Bank 825
Countrywide Home Loans 824
SunTrust Mortgage 822
First Horizon Home Loans 818
Wells Fargo 817
GMAC Mortgage 816
Regions Mortgage 807
CitiMortgage 805
Chase 804
Bank of America 803
Washington Mutual 798
Industry Average 798
Wachovia 797
Fifth Third Bank 790
U.S. Bank 788
World Savings 787
PHH Mortgage 786
ABN AMRO Mortgage 784
National City Mortgage 784
IndyMac Bank 781
USDA RHS 772
CitiFinancial 771
Aurora Loan Services 762
American Home Mortgage 751
Everhome Mortgage 748
Beneficial 747
*HSBC Mortgage 742
Ameriquest Mortgage 738
CitiFinancial Mortgage 738
Homecomings Financial 733
Midland Mortgage Company 706
Greentree Mortgage 692
Litton Loan Servicing 688
EMC Mortgage Corporation 683
Vanderbilt Mortgage and Finance 672
Option One Mortgage 669
Ocwen Financial 627
**USAA Federal Savings Bank 910
Included in the study but not ranked due to small sample size are: Charter One Bank, CIT Group, CitiCorp Trust Bank, Coldwell Banker, Ditech.com, First Franklin, Flagstar Bank, GreenPoint Mortgage, HomeEq Servicing, Household Finance, Navy Federal Credit Union, Saxon Mortgage, Sovereign Bank, and Taylor, Bean & Whitaker Mortgage.
*HSBC Mortgage may include responses for HSBC Mortgage Corporation (USA) and HSBC Mortgage Services.
**USAA is a financial services provider open only to the U.S. military community and their families and therefore is not included in the rankings.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE:MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2006 were $6.3 billion. Additional information is available at http://www.mcgraw-hill.com/.
Media Relations Contacts:
Syvetril Perryman Danielle Kowalski
J.D. Power and Associates Cohn & Wolfe
2625 Townsgate Road, Suite 100 8730 W Sunset Blvd., 5th Floor
Westlake Village, Calif. 91361 Los Angeles, Calif. 90069
(805) 418-8103 (310) 967-2958
syve...@jdpa.com dani...@cohnwolfe.com
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. http://www.jdpower.com/corporate
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Source: J.D. Power and Associates
CONTACT: Syvetril Perryman of J.D. Power and Associates, +1-805-418-8103,
syve...@jdpa.com; or Danielle Kowalski of Cohn & Wolfe,
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Associates
Web site: http://www.jdpower.com/
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Tags: ABN AMRO, Credit Deterioration, Housing Market, Mortgage Defaults, Mortgage Delinquencies, Mortgage Industry Press Release, Mortgage News, Wachovia, Washington Mutual, Wells Fargo Home Mortgage
