Borrowers Increasingly Dissatisfied with Mortgage Origination Process

J.D. Power and Associates released a study in November that found borrower satisfaction with mortgage providers is declining. The overall customer satisfaction decreased five points to 734. In comparison, the 2009 level was 739. The satisfaction rating, by the way, is measured on a 1,000-point scale so it’s not as if either of these ratings is knocking it out of the ball park.

“While the revised Real Estate Settlement Procedures Act (RESPA) guidelines appear to have streamlined and shortened the time from approval to closing, the unintended consequence is that the application to approval time frame has lengthened and become more complicated,” said David Lo, director of financial services for J.D. Power. “Ultimately, this longer timeline has a negative impact on overall satisfaction, although there are specific best practices that may mitigate the negative perceptions.”

The approval time Lo is referring to has gone from 20 days in 2009 to an average of 27.5 days in 2010. In addition, the time frame for the entire origination process has spiked from 46.9 days in 2009 to 52.1 days this year.

The 2010 U.S. Primary Mortgage Origination Satisfaction Study was based on more than 3,000 consumer responses from those who originated new mortgages. The scale measured satisfaction in four areas of the origination process: application and approval process, loan officer/mortgage brother, closing and contact.

The survey also got consumers’ opinions of specific lenders. Quicken Loans ranked the highest in satisfaction, with a score of 826. The mega banks—as if they need any additional bad PR—fared pretty poorly. Bank of America’s rating was 676; JPMorgan Chase’s was 699 and Citigroup was 691.