Homeowners Are Unhappy With Mortgage Companies. Here’s Why

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Human connections are still important in business.


Important points

  • Customer satisfaction among mortgage lenders has decreased due to standardized digital workflows.
  • The ability to work with a real person is still important.

Could it be that we Americans still crave human connection? After seeing ourselves for years as a society that cannot function without technology, is it possible that it really matters to have someone to talk to? If so, it would help explain the latest JD Power Primary Mortgage Origination Satisfaction Study.

Eroding mortgage satisfaction

Despite record low interest rates and millions of homeowners refinancing their mortgages (saving an average of $ 300 per month), customers report that they were less satisfied with their mortgage companies in 2021 than they were in 2020.

According to the JD Power study, mortgage lenders have streamlined their refinancing process to keep up with rising demand. In doing so, they created a kind of digital one-size-fits-all workflow that made some customers feel let down.

As the demand for mortgage approvals and refinancing has increased, mortgage companies have struggled to find ways to transfer as much loans as possible. To speed up the process, lenders offered digital self-help tools that allowed customers to do much of the legwork themselves. Loans might have got through the system faster, but borrowers weren’t necessarily happy with the way they were treated.

Jim Houston, Managing Director Consumer Lending and Automotive Finance Intelligence at JD Power: “It is not enough to provide consumers with electronic applications and digitized tools to streamline activities through to loan completion and accelerate customizable experiences that have the right mix of technology and personal interactions based on their unique needs and desires. “

In other words, borrowers want it all. You want to have easy online access to your loan application, pick up the phone and reach a friendly, knowledgeable representative of the loan company if you have any questions.

The study shows that both banks and non-bank lenders are seeing a decline in their customer satisfaction levels, mainly due to customers who were dissatisfied with their refinancing experience.

CONTINUE READING: What You Should Know About Non-Bank Mortgage Lenders

A look under the hood

We reached out to Craig Martin, Managing Director and Global Head of Wealth and Lending at JD Power to understand what this means.

“When you go under the hood, this year was really that the refinancing experience was slower and more frustrating,” said Martin. “And the people who responded to the survey are people who took out loans from a particular lender. What we don’t track is how many people started with one lender, were dissatisfied, and switched to another lender.”

So what happened Is our technology-loving country dissatisfied with doing everything online? Probably not. After all, the overall customer satisfaction score only dropped 5 out of 1,000, just enough to grab lenders’ attention but not enough to panic.

According to Martin, the volume played a big role this year. For example, a mortgage lender employee may wait for a loan update from the subscription of a particular loan. However, underwriting is slow. Maybe the employee should Call the loan applicant and tell them the underwriting is lagging behind but they are hesitant to do so. The employee not only doesn’t want to share any real news, but also doesn’t want to take the blame for what happened (or not), but also doesn’t want to throw the underwriting under the bus.

The employee feels stuck but is not sure what to do. What they may not be aware of is how much a single phone call would mean to a worried borrower, or how the borrower feels left out of the loop.

“The funny thing I learned is that it’s not just technology that counts,” said Martin. “This is how man delivers the technology.”

Martin said mortgage providers are spending millions on technology and are confident that it will improve the way they provide services. And while technology is important, it is not enough on its own. During stressful times, like buying or refinancing a home, people crave someone else who can help make everything make sense. It’s the marriage of humanity and technology that seems closest to the customer service sweet spot.

“What we find really interesting is that people are looking for a trusted expert and want confirmation,” said Martin. “Similar to asset management, people are looking for guidance and want to have confidence in their decisions. They want to sit down with an expert.”

Martin calls the combination of technology and human interaction “symbiotic”, with each component being mutually beneficial. He says companies that did well in the JD Power survey – like Guild Mortgage and Rocket Mortgage – have figured out how to mix technology with the human touch.

If the JD Power study is any indication, perhaps the real lesson for lenders here is that technology can speed the lending process, but it will never take the place of the people who operate the phones, return emails, and customers otherwise run through the business process.

A historic opportunity to potentially save thousands on your mortgage

Chances are, interest rates won’t stay at a decade lows for much longer. This is why it is important to act today, whether you want to refinance and cut your mortgage payment or are ready to pull the trigger when buying a new home.

Ascent’s in-house mortgage expert recommends this firm find a low interest rate – and in fact, he used it to refinance himself (twice!). Click here to learn more and see your price. Although this does not affect our opinion on products, we receive compensation from partners whose offers appear here. We are always by your side. Check out The Ascent’s full advertiser disclosure here.

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