Is our romance with mortgage lenders over?
There we Americans were hacking our mortgage lenders for a while. They guided us through forbearance programs during the pandemic, showed kindness by helping some of us renegotiate (and refinance) our mortgages, and stayed open during COVID-19 even though most of their employees were working from home.
According to Jim Houston, director of consumer lending intelligence at JD Power, “Mortgage service provider satisfaction was driven by the industry’s response to the pandemic, with some of the largest increases in customer satisfaction coming from at-risk and high-risk customers who participated in Forbearance- Programs. “
Industry-wide, mortgage service providers received high praise during the worst part of the pandemic. Today it seems that we are cooling them down a bit. According to the latest JD Power 2021 US Primary Mortgage Servicer Satisfaction StudyâPeople aren’t quite as fond of traditional mortgage lenders as they were.
As Houston puts it: “When we look at customer behavior and the reactions of low-risk customers, we find that satisfaction is short-lived. Despite attention to utility programs, nearly a fifth of current mortgage customers have had No interaction with their manager last year. Mortgage managers will really need to improve their loyalty games as the market stabilizes. “
Learn more: How to Refinance Your Mortgage
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Who’s out and who’s in
Like a pair of comfy socks, traditional lenders like banks and credit unions remain useful but no longer offer the thrill they once did. It’s the fintech mortgage lenders like Rocket Mortgage that are blowing people’s hair back. In fact, Rocket Mortgage was the top-ranked mortgage company in the JD Power study, beating the closest competitor by 35 (out of 1,000) points.
Houston says customer satisfaction is increasing with non-bank lenders. “What we have slowly seen is that the nontraditional fintech lending institutions are doing better.”
It’s important to note that banks have traditionally enjoyed the highest levels of satisfaction and still do relatively well overall. Customers may have liked them more during the worst part of the pandemic than they do now, but that doesn’t mean this is all bad news for traditional lenders. Many take a closer look at fintechs and find out what the nontraditional lenders are doing to excite people.
For one, it’s easy to see that customers value instant satisfaction. A home buyer can choose to buy or refinance a home and has a credit decision in hand almost immediately. Rather than sit down with a loan officer in a traditional lender’s office, a homebuyer can do it all online or on a smartphone. And it makes customers happy.
Learn more: How to buy a house
That’s why relationships get sticky
While many homebuyers seem to prefer the DIY nature of borrowing from a fintech, they crave customer service in their hearts.
“Customers say that even in distress they value the ability to interact with a lender. They want a lender who has empathy for the borrower’s circumstances and offers solutions that work,” Houston said.
So what is it Do homebuyers want technology or customer service? It seems the magic formula could be a mix of both – a lender who offers compassionate customer service and innovative technology of the 21st
If a mortgage lender asked Jim Houston how to build the perfect, customer-centric business, he would have an answer. “My recommendation is to create an environment where the borrower feels like part of the family and you take care of them like family.”
And if belonging to that family includes access to the best technology available today, it will likely be a love affair.