Lender Customer Satisfaction Up In 2023 Thanks To Borrower-Centric Approaches
Mortgage lenders who pivoted to borrower-centric approaches in the last year saw customer satisfaction soar despite high rates.
That’s according to the J.D. Power 2023 U.S. Mortgage Origination Satisfaction Study, which found overall customer satisfaction with mortgage lenders rose 14 points YOY, even as the average mortgage rate has climbed to its highest level in 23 years and lending volume tanked.
The reason? Increased focus on the borrowing experience, leading to happier customers.
While nearly a third of customers said they chose the lender with the lowest rate, 69% cited other reasons like personalized service and helpfulness.
“The value equation for mortgage originators has shifted from instant approvals and lightning-fast processing to helpful advice and creative problem solving,” said Bruce Gehrke, senior director of wealth and lending intelligence at J.D. Power.
“Lenders that manage this transition well have a great opportunity to build customer goodwill and limit defection by showing customers they understand their unique needs and the challenges of the current market.”
But the survey cautions that prioritizing customer engagement is a balancing act that requires care. Aggressive cost-cutting – including layoffs – which many lenders engage in to stay afloat can disrupt the level of service borrowers now expect.
“To effectively compete in the future, lenders need to set themselves apart by focusing on addressing customers’ unique challenges and meeting their needs rather than selling a product,” said Craig Martin, executive managing director and global head of wealth and lending intelligence at J.D. Power.
Lenders who manage to maintain this service as the market corrects will enjoy the benefits of happy customers even in the increasingly unaffordable market. Mortgage rates have damped buyer demand, but some Americans are getting used to elevated levels and re-entering the market.
In a recent survey, Millennial respondents had inconsistent answers when asked what rate is too high, ranging from 4% to 12%. This suggests that the biggest cohort of buyers in America today are adaptable and may consider homeownership even at higher rates.
Fairway Independent Mortgage Corporation was named #1 for mortgage origination satisfaction, followed by Rocket Mortgage, and Citi.
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