The latest J.D. Power study of borrower satisfaction revealed that loan officer response times are what make or break the experience, and this has pushed many consumers to go digital.

Lew Sichelman is a seasoned writer with 50 years of covering the housing and mortgage markets under his belt. His biweekly Inman column publishes on Tuesdays.

Digital origination channels are playing an increasingly important role in the mortgage process, according to the J.D. Power 2018 U.S. Primary Mortgage Origination Satisfaction Survey. The study, fielded in July and August 2018, is based on nearly 5,200 responses from people who took out a new mortgage or refinanced their current loan in the past 12 months.

Although many might think paperwork and lengthy processing times are what make the lending process a headache, this latest study of borrower satisfaction with lenders revealed that loan officer response times are what make or break the experience. And this has pushed many consumers to use digital platforms to begin the transaction.

People want a quick response

The survey found that customers who heard from the lender’s rep within 24 hours were most satisfied, giving them an overall rating of 869 on a 1,000-point scale. If it took from two to five days to get a response, the rating dipped 17 points to 852.

But if it took six days or more to hear back, the rating fell far more substantially, to just 806, the Costa Mesa, California-based marketing information firm found.

Not surprisingly, the inquiry channel with the quickest contact time was online via a smartphone or tablet.

But even then, the survey found that based on customer recollection, it took two days on average for the lender to respond to the potential client. And it took a few more hours to contact borrowers who reached out via desktop.

Average response times vary

Two days might appear to be a rather slow response time for an online lead, but some lenders took as long as 30 days, making the average slower, according to John Cabell, financial services practice lead at J.D. Power.

Some 55 percent of the respondents recalled their lenders getting back to them within a day or two, but 89 percent said their inquiries were returned within five business days.

Customers prefer digital communication

The survey found the satisfaction level with lenders overall was up 10 points on the 1,000-point scale over the past year, driven in part by the increased use of digital and mobile platforms, the company said.

It also seems consumers are shopping more than they otherwise would when they have different channels at their disposal. Other studies have found that borrowers tend not to shop at all when they look for a lender the old-fashioned way. They tend to pick one and stick with that choice.

Respondents said they most prominently used three different channels: phone, website and email.

“They’re mixing and matching their communication styles depending on what they are trying to accomplish,” Cabell told Inman. “They’re not just shopping. They are using different channels for the entire process, from shopping to application to approval.”

Never underestimate full-service

Despite the ability to go digital, though, only 3 percent of the respondents used the self-service channel exclusively in the origination process.

In fact, overall satisfaction was highest (871) among those who spoke with the lender in person or on the telephone. It was just a few ticks lower (868) when they used a mix of personal attention and self-service tools.

Lender reps add the greatest benefit when they following up on a primary inquiry and in confirming loan terms and payments, the survey found.

Lenders take action

To that end, two of the country’s largest lenders, Wells Fargo and Bank of America, rolled out digital mortgage applications this year. At the recent Mortgage Bankers Association convention in Washington, D.C., Wells Fargo’s Brian Webster said more than a quarter of his company’s mortgage applications now come through its digital channel.

And John Schleck of Bank of America reported that his institution expects half of its applications to be digital by next year.

At the same time, however, Cabell stressed that although digital offerings help boost customer satisfaction, “it is important to find the right balance between digital, self-service offerings and personal interaction with a representative. Technology alone is not a magic bullet in this market; the key is knowing where to leverage it and where to layer in more traditional forms of one-on-one support.”

“The mortgage marketplace is changing rapidly as traditional players and new digital-native entrants ramp up their digital and mobile offerings,” he said.

About the study

The J.D. Power 2018 U.S. Primary Mortgage Origination Satisfaction Survey is based on six factors: application/approval process, interaction, local closing, loan offerings, on-boarding and problem resolution.

As usual, the survey also ranked loan originators based on these factors. And for the ninth straight year, Quicken Loans came out on top with a score of 876. Fairway Independent Mortgage was second (873) and Guild Mortgage was third (857).

Cooper, formerly known as Nationstar Mortgage, made the greatest year-over-year improvement among the 22 lenders scored, jumping 41 points from last year. But a dozen lenders were rated below the industry average of 836.

Lew Sichelman’s weekly column, “The Housing Scene,” is syndicated to newspapers throughout the country.

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