J.D. Power: Mortgage satisfaction decreasing

WESTLAKE VILLAGE, Calif. – For a second consecutive year, customer satisfaction with the servicing of mortgages declined, according to the J.D. Power and Associates 2008 Primary Mortgage Servicer Study released recently.
Overall satisfaction in 2008 decreased 14 index points to 784 on the 1,000-point scale, down from 798 in 2007 and 812 in 2006. Increased billing errors, more service “hand-offs,” and a larger number of customers making late payments all contribute to lower satisfaction levels.
The study measured customer satisfaction with four areas of loan servicing: billing; payments; contact with the lender; and annual account administration.
“For most customers, their mortgage servicer is akin to a utility company – they just want things to work, and they expect a friction-free experience,” said Rocky Clancy, executive director of financial services at J.D. Power and Associates. “Any bumps in the road that cause customers to have to spend time asking questions or solving problems negatively impact satisfaction, particularly if they have to call more than once or talk to more than one person to get their issues resolved.”
The study found that, in addition to reducing the number of problems and improving the resolution experience, a key to customer satisfaction is increasing customer adoption of electronic billing and payments. Fifty-six percent of customers report making payments through an automatic deduction or a Web site, compared with 36 percent of customers making payments by mail. In 2006, 49 percent of customers made payments electronically, while 42 percent paid via mail.
“Satisfaction with payment processing is 50 points higher for people making payments electronically instead of through ‘snail’ mail,” said Clancy. “Automatic deductions, in particular, are associated with fewer problems because once things are on autopilot, the chances of something going wrong are slim.”
Branch Banking and Trust (BB&T), based in Winston Salem, N.C., ranked highest among primary-mortgage servicers for a second consecutive year with a score of 839. BB&T performed well in all four areas driving satisfaction and achieves high levels of commitment from its customers. SunTrust Mortgage (825) and Wells Fargo (813) follow BB&T in the rankings.
CitiFinancial, HSBC Mortgage Services, First Horizon Home Loans, Beneficial, Homecomings Financial, Greentree Mortgage and Ocwen Financial were among the lowest scorers in the study.
The 2008 Primary Mortgage Servicer is based on responses from 10,241 home owners regarding their experiences with their primary-mortgage servicer. The study was fielded in July 2008.