Mortgage servicers are a real standout in the latest J.D. Power survey — and not the kind of standout that leads to high-fiving around the office. Among all the industries reported, they have one of the lowest Net Promoter Scores (NPS), a gauge of customer loyalty. They land just above health plans and below life insurance in overall satisfaction, with 777 points on a 1,000-point scale.
Quicken Loans is the highest-ranked mortgage servicer for the sixth consecutive year, with a score of 878. Regions ranks second (848), followed by Guild Mortgage (828). Then come the banks: Citizens and Huntington National (817), as well as Chase (809).
Don’t Like Your Servicers? Tough.
The current mortgage process often doesn’t give homeowners much power. They rarely get to choose their servicer, and banks are free to sell off packages of mortgages.
Ron Lieber, the Your Money columnist at The New York Times, recounted his efforts to move his mortgage payments: “What I wanted to do was the following: strip Wells of the right to collect my monthly mortgage check for the next 23 years and hand it to a servicing company of my choosing. Turns out I don’t have that power.”
The best deal he found was from Quicken and cost $300 more per month, although it ended in 20 years rather than 23 and had closing costs of $6,200. His wife, though accustomed to his quixotic ways, objected, so he is still with Wells, which ranked 23rd on the J.D. Power list (score of 761).
Customer Experience Matters
So if customers are stuck, why should a bank worry about the customer experience?
Well, said John Cabell, director of wealth and lending intelligence at J.D. Power, it will certainly influence a customer’s choice the next time they seek a mortgage.
In making the biggest purchase of their life, customers appreciate some interaction and education upfront.
“They want advice and value interaction,” Cabell said.
That advice and interaction seem to be missing, considering 70% in the survey said they don’t fully trust their mortgage servicer. Among the other 30% who said they “completely trust” their provider, high satisfaction manifested in several ways: They rated their provider 256 points higher and were three times more likely to use the company for their next mortgage.
Higher-Scoring Servicers Are Using Tech
For many customers, servicers’ laser focus on “lowering costs, managing regulatory compliance and minimizing delinquencies has come at the expense of customer experience,” said Cabell of J.D. Power. At large banks, mortgage servicing is usually a separate silo, often low on the tech refresh priority list.
“Generally servicers lag in adoption of new technologies and interfaces. Originators are sometimes a little better but not up to speed with banking.”
Some of the higher-scoring servicers are already taking steps to provide interaction and education, as well as to offer digital tools. Most of these efforts are pretty basic in the grand scheme of today’s world of financial innovation, but they’re certainly steps in the right direction.
Guild Mortgage has pages of information on its website covering topics such as the difference between an adjustable rate mortgage and a fixed rate loan, as well as how to finance a fixer-upper.
Citizens Bank, which tied for fourth, said it offers customers a choice of channels, including all digital.
“We have found that customers tend to have higher levels of overall satisfaction using self-serve channels to manage their mortgage because of the convenience of being able to do it whenever and wherever they choose,” the bank said in an email.
Approximately 21,000 customers have downloaded and registered to use Citizens’ new mobile app in the five months since it launched, the bank added.
“Based on customer feedback so far, we anticipate that mobile adoption will continue to grow steadily.”