Lenders have been putting an emphasis on customer satisfaction, and borrowers have noticed the difference in service.
Homeowner satisfaction with mortgage services has increased since last year, according to J.D. Power's yearly survey of the mortgage servicing industry. On a scale of 1,000 points satisfaction currently stands at 754. In 2013 satisfaction was rated at 733.
For the second straight year mortgage servicers have improved overall satisfaction, specifically for at-risk customers, partially thanks to technologies made to make the mortgage process more efficient and simple the J.D. Power study found . For at-risk borrowers satisfaction with their lenders increased 42 points year-over-year. The four factors that the study takes into account are the billing and payment process, how escrow accounts are managed, website ease of use and phone availability.
Enhanced technology driving consumer satisfaction
The change has come about partially due to state and federal regulations, but Craig Martin, director of J.D. Powers' mortgage practice, believes there is more to consumer satisfaction with their mortgage servicers than the regulations in place, he explained to the Chicago Tribune. He believes that the content borrowers feel has more to do with servicers' roles as caretakers. It is easier than ever for consumers to contact their lenders, and make payments through a website or smart phone.
"They're trying to reduce cost," Martin told the news source. "The business has been done. How do you make more money? Really the answer is fewer problems, fewer calls. If you can service more people with fewer humans and fewer calls, that's good for the customer and good for the firm."
Lenders' further adoption of technology has been important in increasing satisfaction, the J.D. Power study explained. Often, at-risk borrowers will use their mortgage servicer's website in order to view their monthly billing information. Low risk consumers usually use their lender's website to review their transaction histories.
In fact, overall satisfaction is 39 points higher for those who use their servicer's website than it is for borrowers who receive paper statements, the study noted. More consumers still receive paper statements, than those who view them online, 53 percent and 34 percent respectively. Lender websites began to include features such as escrow guides to ensure a better customer experience.
Consumers often go online in search of answers for their loan questions. The J.D. Power study explained that because of this transparency and simplicity are necessary in order to provide an enjoyable customer experience. It found that out of those customers who went to a website for lending clarity, satisfaction was 105 points higher for those who could solve their issue entirely through the site.
Many small, non-banking financial institutions acquired high-risk loans from larger bank lenders, according to the Chicago Tribune. This led to large banks such as Chase and Wells Fargo Home Mortgage making the top of the overall satisfaction rankings, while smaller institutions like Ocwen Loan Servicing and Nationstar rounded out the bottom of the list.
"Historically that (customer) group is going to be less satisfied," Martin told the newspaper. "If I am late, delinquent, having trouble making payments, I'm going to be less satisfied with my servicer. They're handling much more complex problems."