J.D. Power and Associates Reports: Amid Record-Low Interest Rates and Improved Loan Modification Programs, Customer Satisfaction Increases
WESTLAKE VILLAGE, Calif., July 19, 2012 /PRNewswire/ — Historically low interest rates, combined with proprietary and government loan modification programs, have helped reduce the number of homeowners in distress, according to the J.D. Power and Associates 2012 U.S. Primary Mortgage Servicer Satisfaction Study(SM) released today.
According to the study, 7 percent of homeowners indicate their loan status is “current” as a direct result of a loan modification or other payment arrangement, compared with 4 percent in 2011. In addition, 15 percent of customers say they have concerns keeping mortgage payments current, down from 17 percent in 2011.
“Over the past few years, among the primary reasons for lower levels of satisfaction were challenges in addressing the needs of customers concerned about making their payment or who were already delinquent,” said Craig Martin, director of the mortgage practice at J.D. Power and Associates. “Significant improvements in mortgage servicing, particularly with the method in which calls are handled, have improved customer satisfaction for the first time in three years.”
Overall satisfaction with primary mortgage servicers has increased to 725 (on a 1,000-point scale) from 718 in 2011. The study measures customer satisfaction in four areas of the mortgage servicing experience: billing and payment process; escrow account administration; website; and phone contact. Satisfaction in all factors has increased from 2011.
Overall satisfaction among at-risk customers, those who are behind on their mortgage payments or are concerned about making future payments, improves the most, increasing by 27 points from 2011, compared with non-prime and prime customers (+3 point and -3 points, respectively). At-risk customers are the most likely to contact their mortgage servicer (75%), compared with non-prime (41%) and prime (32%) customers. Satisfaction among customers who contact their servicer via phone increases by 52 points from 2011.
“In the past, satisfaction is typically higher when customers do not need to contact their servicer, which makes the increase in overall satisfaction among at-risk customers that much more impressive,” said Martin. “By focusing on improving the contact experience, servicers have been able to improve satisfaction among customers who are most likely to be dissatisfied.”
The Consumer Financial Protection Bureau (CFPB) is proposing new mortgage servicing rules that, if passed, will go into effect in early 2013. Once in place, mortgage servicers will face new challenges in providing high levels of service, while ensuring the proper processes and procedures are in place to meet the new guidelines.
“Servicers will be under pressure to comply with the guidelines and must ensure that they not only have appropriate processes in place, but that they also understand the new rules and adhere to them as well,” said Martin.
U.S. Primary Mortgage Servicer Satisfaction Study Results
BB&T (Branch Banking & Trust) ranks highest in customer satisfaction among primary mortgage servicers for a third consecutive year, with a score of 803, a 35-point increase from 2011. BB&T achieves the highest scores in three factors: website; escrow account administration; and billing and payment process. Regions Mortgage follows in the rankings with a score of 779, while SunTrust Mortgage ranks third with 758.
Consumers also play a role in creating a better experience with their mortgage servicer. J.D. Power offers the following tips, based on study findings, to help customers avoid instances that may negatively affect their mortgage servicing experience.
- If you tried to refinance your mortgage in the previous 6-12 months and didn’t qualify, consider trying again. New government programs have recently been implemented to assist current mortgage customers, making it easier to modify or refinance. For more information on government programs designed to assist mortgage customers, such as HAMP and HARP, visit www.makinghomeaffordable.gov.
- Make sure you’re familiar with your mortgage servicer’s payment options, terms and policies, specifically regarding late payments, in order to help keep your account in good standing and avoid going into delinquent status.
- Avoid paying your bill on the last day of your grace period, as sometimes these payments don’t post to your account right away, which may result in fees or other late payment penalties. Consider receiving your bill and paying your mortgage online and taking advantage of all the services and information that your mortgage servicer provides on their website.
- Understand that it is also in the mortgage servicer’s best interest to keep your account in good standing. If you currently have a delinquent mortgage, be proactive and talk to your servicer about working out a payment plan that will work for both parties.
The 2012 U.S. Primary Mortgage Servicer Satisfaction Study is based on responses from 5,623 customers regarding their experiences with their primary mortgage servicer and was fielded between April and May 2012.
Customer Satisfaction Index Ranking J.D. Power.com Power Circle Ratings (Based on a 1,000-point scale) For Consumers BB&T (Branch Banking & Trust) 803 5 Regions Mortgage 779 4 SunTrust Mortgage 758 4 Chase 752 4 PNC Mortgage 739 3 U.S. Bank 739 3 Wells Fargo Home Mortgage 738 3 Fifth Third Mortgage 736 3 GMAC Mortgage 725 3 Industry Average 725 3 EverHome Mortgage 709 3 HSBC Mortgage Corporation (USA) 708 3 Bank of America 707 3 CitiMortgage/Citibank 707 3 Flagstar Bank 702 3 MetLife Home Loans 700 3 Provident Funding Associates 697 3 PHH Mortgage 695 3 Aurora Loan Services 669 2 OneWest Bank 667 2 Homeward Residential* 643 2 Nationstar Mortgage 621 2 Ocwen Loan Servicing 613 2
Included in the study but not ranked due to small sample size are Cenlar, Dovenmuehle Mortgage and Saxon Mortgage Services.
*Formerly American Home Mortgage Servicing
Power Circle Ratings Legend:
5 – Among the best
4 – Better than most
3 – About average
2 – The rest
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
McGraw-Hill announced on September 12, 2011, its intention to separate into two public companies: McGraw-Hill Financial, a leading provider of content and analytics to global financial markets, and McGraw-Hill Education, a leading education company focused on digital learning and education services worldwide. McGraw-Hill Financial’s leading brands include Standard & Poor’s Ratings Services, S&P Capital IQ, S&P Indices, Platts energy information services and J.D. Power and Associates. With sales of $6.2 billion in 2011, the Corporation has approximately 23,000 employees across more than 280 offices in 40 countries. Additional information is available at http://www.mcgraw-hill.com/.
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