The customer survey and the ranking of mortgage service providers 2020 by J.D. Power reflects the enormous impact of the coronavirus pandemic, but surprisingly not entirely negative.
For the entire industry, the average level of satisfaction rose slightly from 777 in the 2019 survey to 781.
Part of this increase results from an increase in consumer confidence in their servicers over the previous year. This particular metric improved 12% from 762 a year ago to 770.
"Lenders have been more responsive to how consumers think and … (feel) about them, especially in circumstances that are not optimal," said Jim Houston, director of consumer lending intelligence at J.D. Power.
While the servicers remained the same at the top and bottom of the survey ranking, there was some compression between their respective ratings.
Quicken Loans remained the most satisfied mortgage service provider at 854, but declined from 878 a year earlier.
At the end of the survey, PHH, which was known as Ocwen last year (the company changed branding after a merger), saw its score increase 10 points over the previous year to 667.
The distinction between the highest and the lowest, Houston said, is not that the servicer doesn't offer anything. "It's the nuances within what they do. There are nuances within the processes that are more consumer-friendly than others."
The big winners included Provident Funding, up 37 points from a year earlier to 790, US Bank up 33 points to 802 and TD Bank 25 points to 815.
According to Houston, most lenders, whose scores have increased since 2019, made their profits from improved proactive communication and customer interaction.
Among the largest banking service providers, Chase achieved 810, Bank of America 804 and Wells Fargo 773.
Respondents to the 2020 survey placed more emphasis on the quality of digital interactions and other cases where consumers engage their servicers "outside of normal channels," Houston said. The survey also tracked how often customers heard about their servicer.
The survey was conducted over a six-week period beginning on March 16, from when the government began offering various forms of relief, including forbearance.
The survey found that various conditions associated with the corona virus – low interest rates, record high unemployment, and increased loan defaults – led to increased website usage, long waiting times with call centers, and very little proactive communication.
All of this can affect overall customer satisfaction, Houston said.
"The COVID-19 pandemic has significantly widened the gaps in customer satisfaction, digital experience, and call center experience that have been a challenge for mortgage service providers for some time," said Houston.
"At a time when the need for optimized, effective digital advice and proactive contact and advice is more important than ever, mortgage customers don't find the answers they need online and put them in long lines for customer service in call centers and leave this search for answers on how to best address your challenges, "he added.
The Mortgage Bankers Association's first forbearance survey, which ran through April 1, found that servicer's call centers had problems with the flood of relief requests.
The average hold time was 17.5 minutes with a dropout rate of 25%.
Things have improved a lot since then. On July 19, the average call answering speed was 2.6 minutes and the abandonment rate was 6.8%.
However, the study finds that consumers don't compare the website experience to what other service providers offer. Rather, they're comparing to all the other websites they do business with, like Amazon or the utilities they have accounts with, Houston said.
Consumers want to go to their service provider's website, find the information they want with less than two clicks, and understand what options they have at that time instead of having to contact an agent, he said.
More than three fifths (62%) of the respondents stated that they had visited their lender's website as the first source of information. But only 28% said online was the most effective way to solve a problem.
Among those who were unable to solve their problems on the lender's website, 45% said they were satisfied only after picking up the phone to speak to a representative.
But then you can actually talk to someone. Just under 20% said it was not easy to contact a live agent on the phone.
Proactive communication contributes significantly to satisfaction, but consumers reach a point where it is too much.
Overall, customers who receive three or four proactive messages from the servicer are the most satisfied. However, only 8% of customers state that they maintain this level of communication.
At the same time, 40% of respondents said they had not received any proactive communication from their lender. In the meantime, 29% state that they have received 11 or more messages. According to the survey, too few or too many messages cause satisfaction levels to drop.