Mortgage servicers’ distraction with regulatory issues has left most of their borrowers less satisfied. Despite incentives for non-bank servicers to focus on loan performance instead of borrower relationships — it was a non-bank servicer that was rated best by its borrowers.
Among all residential loan servicers, the overall  mortgage servicer satisfaction index was 718 for this year. The score is based on a thousand-point scale.
The score indicates that borrowers are less satisfied with their mortgage servicers than they were a year earlier, when the index came in at 754.
That was according to the
J.D. Power 2015 U.S. Primary Mortgage Servicer Satisfaction Study.
Responses were collected in March and April from 5,922 borrowers who have had a mortgage on their primary residences for at least a year.
J.D. Power based its findings on six factors including new customer orientation, which had a seven percent weighting; billing and payment process, with a one-third weighting; escrow account administration, which accounted for 16 percent of the total score; interaction, representing 14 percent of the total; mortgage fees, with a one-fifth weighting; and communications, representing 11 percent.
Other factors considered were risk-loan status, servicing transfers, tenure with servicers, specialty programs and demographics.
Eighty-five percent of the individual borrowers whose
satisfaction scores were at least 900 said they would definitely recommend their servicer, and nearly three-quarters said they would definitely use their servicer on their next home purchase.
The report indicated that today’s highly regulated environment has servicers
spending a disproportionate amount of time and resources on the 15 percent of their borrowers who are delinquent or at risk of becoming delinquent at the expense of on-time paying borrowers.
As a result, customer satisfaction is being adversely impacted for the majority of their borrowers.
Craig Martin,
director of the mortgage practice at J.D. Power, noted in the report that non-bank servicers have been more motivated to keep loans current than to improve the relationships with their borrowers.
“As non-bank servicers have gained an increasingly larger share of the market, they have tended to apply policies geared toward at-risk customers that are designed to avoid legal or regulatory actions,” Martin stated.
Among the shortcomings of non-bank servicers are website upgrades such as self-service functions. In fact, the report said websites that enable borrowers to completely resolve
issues online pushed the satisfaction score up to 765 from 650 for servicers with websites that don’t enable complete resolution.
When borrowers are unable to resolve their issue online, they call
a live agent for help — increasing the cost and the negative impact on satisfaction.
As a result, the score for satisfaction with website interaction among servicers was 750 — 86 points less than for retail banking websites and 75 points below credit card websites.
“More than one-fourth (26 percent) of mortgage customers indicate having had a sub-optimal self-service experience and having had to turn elsewhere for support, resulting in a 115-point decline in overall satisfaction,” the report stated.
J.D. Power noted that 14 percent of borrowers give up on trying to resolve issues entirely — leaving them more likely to seek regulatory help.
Another detrimental issue is the transfer of servicing, with borrowers whose loans were transferred at least twice having scores that were 102 less than those whose servicers originated the loan.
The highest-ranking servicer was Quicken Loans Inc. with a score of 834. The online lender, which reported a $177 billion servicing portfolio as of June 30, only began servicing the loans it originates in 2010.
The Detroit-based lender, which also rated highest last year, said it ranked No. 1 in all six categories considered.
Quicken ranked high on website interaction satisfaction, with a score of 868 in this category.
“In an industry where many look at servicing a loan as merely collecting payments and harassing customers, we see this part of the business as an opportunity to build and continue long-term robust relationships with our clients,” Quicken Founder and Chairman Dan Gilbert said in a written statement. “We obsess over every detail of the mortgage process and are always encouraging our 13,000 team members to find better ways to simplify and improve the entire client experience for all of our clients.”
No. 2 on J.D. Power’s ranking was Citizens Bank, which had a score of 768. The Providence, Rhode Island-based financial institution was not rated in 2014.
Capital One came in third with a 742 score. The bank soared from 15th position in the 2014 ranking.
Fifth Third Mortgage followed with a score of 740.
The Cincinnati-based company, which serviced $84 billion as of mid-2015, was No. 12 last year.
No. 5 in this year’s report was U.S. Bank, ascending from
No. 8 a year prior. The Minneapolis-based firm, which reported a $293 billion servicing portfolio as of the end of last month, had a score of 739 in the latest report.
Chase, which had the second-highest score in 2014, fell to
No. 10 this year. The bank reported a servicing portfolio of $917 billion as of the end of the second quarter.
