Revealed - lenders with highest customer satisfaction

Talk about a change in mood. In the span of a year, the US mortgage industry has gone from record volume and profits to a 22-year low in demand for new mortgages. Along the chaotic ride, mortgage providers are struggling to differentiate themselves to customers whose expectations have risen, according to a new study.

The study, by JD Power, underscores that the struggle to differentiate comes at a time of even more intense competition in the mortgage industry. According to the J.D. Power 2022 US Mortgage Origination Satisfaction Study, the average mortgage customer experience has become increasingly commoditized, with few lenders finding the right formula to build long-term trust and loyalty that truly stands out from the competition.

Without further ado, the study’s rankings: Rocket Mortgage ranks highest in mortgage origination satisfaction, with a score of 750. Chase (736) ranks second, while City (733) and Fairway Independent (733) each rank third in a tie.

Craig Martin, executive managing director and global head of wealth and lending intelligence at JD Power, spoke to Mortgage Professional America about the findings. He noted mortgage companies had done a good job of enhancing their technology and revamping their customer experience but were now failing to stand out amid the struggle: “Everyone has upped their game,” he said of the other enhancements. “The bar’s been raised but no-one’s standing out. In some ways, it’s become commoditized.”

Read more: Rocket’s ranking in JD Power survey a fillip for EVP

Given the industry downturn, Martin noted, lenders should strive to differentiate themselves as trusted advisors who can guide customers through the lending process while offering valuable counsel along the way. This requires a ramping up of communication – keeping customers informed throughout the lending process and ensuring consistent and effective communication through all channels.

Unfortunately, Martin added, less than one in three customers said their lenders were able to deliver that optimal experience.

“What we’ve seen in the last couple of years is so much push on rates and refinancing,” he said. “All this emphasis on the product sends the message that you can get this anywhere. It’s all about the rate and speed – which are important things, but then they [customers] go: ‘What’s next?’ Consumers’ demands and expectations are rising. What the data tells us is a lot of people are getting the same overall outcome that ‘eh, I’m pretty happy,” he said, effecting a somewhat resigned tone of voice.

Among the study’s key findings:

• Commoditized customer experience: The top- and bottom-performing lenders in overall satisfaction in this year’s study are separated by just 87 points (on a 1,000-point scale), with very little variation in overall satisfaction among the top 10 companies evaluated. Additionally, the number one reason given for choosing a specific lender is rate, which suggests that lenders may be placing too much emphasis on price, reinforcing the notion that there is little difference in the products.
   
• Missing an opportunity: The key attributes customers are seeking in their mortgage lender are expertise; guidance; and communication. These are conveyed in the form of responsiveness, keeping customers informed, having an effective website and delivering consistent communications throughout the lending process. Currently, just 28% of lenders are successfully meeting all these key criteria.
   
• Less than half of mortgage customers kept fully informed: During the lending process, there are six key moments of truth that determine whether or not the lender is viewed as a trusted advisor: providing advice on customers’ financial situations; explaining the application process; fully answering application-related questions; meeting expectations for what is required; explaining the closing process; and providing information about servicing. Less than half (48%) of mortgage customers say they were kept fully informed in all the phases of the process.
   
• Appetite for digital, but most interactions still involve humans: While approximately 40% of mortgage customers indicate a willingness to complete the entire lending process via self-service digital tools, 67% are currently interacting with human representatives via phone.

“A rising tide of record demand and historically low interest rates hid a lot of the challenges lenders have been facing in forging more meaningful, lasting connections with customers and moving beyond a transactional, rate-driven relationship,” Tom Lawler, head of consumer lending intelligence at J.D. Power, said in a prepared statement. “Now, as the macroeconomic situation has reversed course, these relationship-driven attributes have become critical for lenders that want to convey a more unique value proposition and build more lifetime customers in a highly competitive marketplace.”

Read more: Revealed – just how satisfied are consumers with mortgage originators?

The US Mortgage Origination Satisfaction Study, formerly known as the US Primary Mortgage Origination Satisfaction Study, has been redesigned for 2022. It measures overall customer satisfaction based on performance in six factors (in alphabetical order): communication; digital channels; level of trust; loan offering meets my needs; made it easy to do business with; and people. The study was fielded from June through August 2022 and is based on responses from 5,915 customers who originated a new mortgage or refinanced within the past 12 months.