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By Sally Duros
J.D. Power has weighed in on customer satisfaction with the process
of servicing a loan, and some customers are not happy.
Surprise! If you are like most hapless recent mortgage holders,
you’ve had the pleasure of seeing your mortgage passed around like
a hot potato every six months or so.
Especially disgruntled in the J.D. Power study are mortgage
customers who report making a late payment in the past 12 months.
They indicate that lenders are showing some flexibility in
scheduling late payments, but tend to be less understanding and
accommodating of their circumstances when compared to 2006,
according to the J.D. Power and Associates 2007 Primary Mortgage
Servicer Study released Wednesday.
“We are the voice of the consumer” delivering a message to the
large mortgage servicing companies, said Tim Ryan, senior director
of mortgage financial services with J.D. Power.
Thomas P. FitzGibbon Jr., executive vice president with MB
Financial Bank, Rosemont, noted, “Systemically, the top 10
servicers control 70 percent of all the servicing in the country.
With the high number of delinquencies, defaults and foreclosures,
servicing companies that do not staff up will not have the critical
knowledge to deal with a customer who has a payments issue.
“This also happened in the banking and thrift crisis. Lots of shops
were going away, and other companies had to take on the business, ”
The study measures customer satisfaction with the process of
servicing a loan based on four primary areas: the administration of
the customer’s account; the billing process; the payment process,
and the process of contacting the mortgage servicer.
Branch Banking and Trust, BB&T, with a score of 860 on a 1,000
point scale, was graded as the top primary mortgage servicer in the
nationwide survey of 39 mortgage servicers consumers.
“From the consumer’s perspective, this information can give you a
first cut from an independent source of who is providing good
service,” Ryan said.
Following in the ranking were M & T Mortgage, with an 828 score,
and Citizens Bank, with a score of 825.
“BB&T is a terrific servicer,” FitzGibbon said.
J.D. Power said these lenders earned high scores because they do a
good job of keeping billing statement error rates lower than the
industry average; providing a range of options for making payments;
providing flexibility when scheduling electronic payments;
designing and/or using automated phone systems that address
customer needs, and handling customer contacts quickly and
While borrowers who have made late payments indicate their lenders
are slightly more flexible in scheduling payments, customer ratings
for the ability of lenders to understand their specific
circumstances and their willingness to work with them declined from
the 2006 study, J.D. Power said.
Power’s Ryan added, “Despite lenders being flexible with late
payment situations, customers still feel as if their mortgage
servicer is being less considerate of their specific circumstances.
It is mutually beneficial for both borrower and lender to work
through these difficult time periods, and lenders can support the
majority of these customers by being even more considerate of their
situation. These circumstances often lead to the development of
valuable, regular-paying customers.”
The J.D. Power rankings have more power to move the markets than to
move consumers. Given the current meltdown in the mortgage
securities markets, those servicers who pay close attention to what
consumers say will be more likely to enjoy the benefit of new
business as investors move servicing around.
“What we find in our study is that satisfaction is higher among
people whose servicing lender is the same as the originating
lender,” Ryan said. “If you are in the market for a new mortgage or
refinancing, these rankings might lead you in a certain
In most cases, we cannot choose who services our mortgage. Instead,
we enjoy the treat of our mortgage servicing being handed off by
investors as the market changes.
BB&T has “a very satisfied group of customers,” Ryan said. “They
have a high proportion of customers who make payments within the
branch. That’s a bit of an anomaly. Their error rate in terms of
statements and escrow analysis is very low. And their ability to
resolve problems is very good.”
These days, investors who pay attention to the J.D. Power rankings
will be looking for a good place to park your servicing, planning
that it will stay there — alleluia!
Said MB Financial’s FitzGibbon, “As an investor I would want to
make sure that my servicing would go to a company that I could
trust to do it right.”
Credit: The Chicago Sun-Times