About One-Fifth of Mortgage Borrowers Were Unhappy With Their Lender
About One-Fifth of Mortgage Borrowers Were Unhappy With Their Lender
Chris Gash
As if house-hunting weren’t stressful enough: 21% of home buyers regretted their choice of mortgage lender, according to the findings of a recent customer-satisfaction survey. Among first-time home buyers, 27% regretted their choice of lender.
The J.D. Power 2016 U.S. Primary Mortgage Origination Satisfaction Study found that unhappy mortgage customers fell into two categories. One group cited a lack of communication, unmet promises and other problems with the lender. The other group of respondents said they felt pressured to choose a particular mortgage product.
The mortgage-origination process can frustrate even experienced real-estate professionals. Lisa Abrams, an agent with Re/Max Town Center in Potomac, Md., has represented buyers and sellers of more than 500 homes in her 20-year career, guiding many through the mortgage-application process. But when it came time to obtain a $600,000 jumbo loan for her home purchase in June, Ms. Abrams had such an unsatisfactory experience with her first lender that she withdrew that application and applied elsewhere. “They basically went off a checklist,” she says. “The things they asked for were absurd.”
One example: Ms. Abrams was repeatedly asked to explain large deposits in her bank account after she explained numerous times that she’s a real-estate agent who gets paid intermittently on commission.
In the survey, Detroit-based Quicken Loans ranked highest in customer satisfaction for mortgage originations, followed by CitiMortgage and Ditech Financial.
Specialty lenders USAA and Navy Federal Credit Union actually earned higher scores than the top-ranked lenders but weren’t eligible for ranking because they don’t serve the general public. The survey was conducted in July and August, with results based on the experiences of 5,182 respondents who had originated a new mortgage or refinanced within the past 12 months.
Quicken has “a kind of corporate mandate that they’re always going to call the customer back and keep them informed of what’s going on, no matter what. There is a hyper-vigilance on communication,” says Craig Martin, director of the mortgage practice at J.D. Power.
The lender scored particularly well in the J.D. Power survey for its Rocket Mortgage product, which automates much of the application process by allowing customers to go online to apply for a loan and upload documentation. The Rocket system uses a third-party firm to verify an applicant’s employment and works with about 95% of the country’s banking institutions to automatically verify assets.
“Rocket helps eliminate some of the paperwork,” says Jay Farner, president and chief marketing officer of Quicken Loans. “It takes about 10 minutes.”
But even traditional lenders can create policies that improve customer satisfaction by enhancing communication and meeting applicants’ expectations. “A lot of big mortgage companies are going for huge volume and hope that their clients seek vanilla loans where they can just check off boxes,” says Alan Rosenbaum, founder and chief executive officer of GuardHill Financial Corp. in New York City, which wasn’t included in the survey due to its small size. “We explain the whole process to them from day one—what we will be looking for, when we need it, what can go wrong and the timeline. We guide our clients to structure the best deal for them.”
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