The combination of reduced financial health, a rise in mortgage transfers and an increase in the number of reported account problems all contributed to the “significant decline” in customer satisfaction with mortgage services this year, according to the 2023 U.S. Mortgage Servicer Satisfaction Study by J.D. Power.
On a 1,000-point scale, overall customer satisfaction with mortgage servicers is at 601 points this year, down 6 points from 2022. Customers took the brunt of recent economic challenges, which affected their satisfaction with their mortgage servicers.
“The past year has been an incredibly challenging time for both customers and the mortgage industry – and there remains a lot of uncertainty. So far, the worst-case scenarios haven’t come to bear but mortgage servicers need to ensure they aren’t ignoring key advanced indicators,” Craig Martin, executive managing director and global head of wealth and lending intelligence at J.D. Power, said in a statement.
Financially unhealthy mortgage customers rose to 54 percent this year from 48 percent last year, and among them, overall satisfaction with mortgage services was down 107 points versus the financially healthy category.
Default risk among mortgage customers is also up 4 percent this year versus the previous year.
“Servicers need to ensure they are building trust and engaging with their customers so they can effectively stay ahead of potential problems when customers face financial hardships,” Martin said in the statement. “When customers lack trust in their servicer, the costs to serve increases materially because those customers will gravitate to more costly service channels and they are at higher risk to take their complaints beyond the company.”
Customers also lamented mortgage transfers; the most significant drop in satisfaction was among the 37 percent of customers who had their mortgage transferred to a servicer that they did not choose. Overall satisfaction scores are 119 points lower when customers do not choose their servicer.
“It’s at times like this, when market conditions and personal financial health are strained, that great customer experiences can have the biggest influence on loyalty and advocacy,” Bruce Gehrke, senior director of lending intelligence at J.D. Power., said in a statement. “Servicers that recognize proactive customer outreach and effective problem resolution as opportunities to build stronger client relationships – rather than obstacles to overcome – are in a great position to differentiate themselves and set a new standard for the industry to follow.”
Rocket Mortgage ranked the highest among mortgage servicers with a score of 686, while Guild Mortgage (668) ended second and Chase (665) landed in third place.
