Borrowers have become more satisfied with their mortgage lenders compared to last year, according to a survey by J.D. Power.
On a 1,000-point scale, overall customer satisfaction with loan originators improved to 771 this year from 761 last year. The survey is based on responses from more than 3,250 customers who got a new mortgage, or refinanced in the past 12 months.
"Two areas that improved the most were the application approval process and the closing process," says Craig Martin, director of the financial services practice at J.D. Power.
Lenders seem to be doing a better job of communicating with customers, Martin says. And the trend is expected to continue as lenders try to differentiate their services to compete for business from homebuyers, now that the demand for loans from refinancers is shrinking.
"There has been a renewed focus on the customer experience in the mortgage industry over the past few years," he adds. "Now, there's going to be a hypercompetition for a much reduced population of customers, so I think their experience will continue to improve. It's a good time to be a borrower."
Bummer over fee surprises
But there's still plenty of room for improvements, he says. That's especially true for homebuyers. About 17 percent of first-time homebuyers in the survey report they incurred additional fees at closing, compared to 8 percent of repeat buyers and 7 percent of refinancing customers.
The loan originators that ranked highest for customer satisfaction in the survey are:
- Quicken Loans
- U.S. Bank
- PNC Mortgage
The loan originators that ranked the lowest for customer satisfaction the J.D. Power survey are:
- Fifth Third Mortgage
- Provident Funding Associates
- Bank of America
- Flagstar Bank
- PHH Mortgage
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