Reforms instituted as a result of the National Mortgage Settlement as well as through the Consumer Financial Protection Bureau (CFPB) helped drive an increase in overall customer satisfaction with primary mortgage servicers during the past year, according to the J.D. Power 2013 U.S. Primary Mortgage Servicer Satisfaction Study.
The report, which measures consumer satisfaction in four areas – billing and payment process, escrow account administration, website and phone contact – finds that overall satisfaction with primary mortgage servicers has increased to 733 (on a 1,000-point scale) from 725 in 2012. It is based on responses from 4,669 customers regarding their experience with their primary mortgage servicer between April 17 and May 8.
While the report finds that customer satisfaction with the large servicing organizations has improved, satisfaction with the smaller servicers, which tend to deliver higher quality service, has decreased slightly, with some of them shifting back toward the national average. J.D. Power said this leveling off could be due to the recent increase in volume smaller servicers have been facing, coupled with the fact that they are scrambling to prepare for the new CFPB rules that are scheduled to take effect starting in January.
Of the five large banks involved in last year's National Mortgage Settlement, CitiMortgage, J.P. Morgan Chase, Ally Financial and Wells Fargo all saw increased customer satisfaction scores, while Bank of America saw its score dip slightly compared to last year. The $25 billion settlement requires these banks to make changes to the way they service mortgages, including adequately training staff, ending improper fees and dual tracking, maintaining better communication and appointing a single point of contact for loss mitigation efforts.
The top three servicers, in terms of customer satisfaction scores, included BB&T (Branch Banking & Trust Co.), which was No. 1 for the fourth consecutive year with a score of 765, Regions Mortgage with a score of 764 and SunTrust Mortgage with a score of 762.
Pure-play servicers that failed to boost their scores in the past year included Nationstar Mortgage and Ocwen Loan Servicing, according to the report.
‘This study helps gauge the effectiveness of firms' servicing capabilities from the customer's perspective,’ said Craig Martin, director of the financial services practice at J.D. Power. ‘The fact that satisfaction continues to increase seems to indicate that changes being made in response to these new regulations are having a positive impact on the experience of customers.’
The CFPB's new single-point-of-contact rule, which many servicers have already instituted ahead of the January deadline, appears to be a major driver of customer satisfaction, according to the study. This new rule requires servicers to provide a single contact, or set of contacts, for each borrower who is in default for the purpose of reducing confusion, particularly when it comes to loan modifications and foreclosures.
Overall satisfaction among customers who indicated they had a single point of contact was 154 index points higher, on average, compared to those who worked with multiple representatives.
‘The new policies governing communication, particularly the appointment of a single point of contact, might easily become the de facto standard for problem resolution across all mortgage servicers in the near future,’ Martin said.
Interestingly, the survey reveals that consumers who are well educated about their options and rights are the most satisfied with their servicing experience.
For more, click here.