News Column

Homeowners More Satisfied With Mortgage Servicers

July 31, 2014

Mary Ellen Podmolik, Chicago Tribune

Hispanic home buyers (file image)
Hispanic home buyers (file image)

July 31--Homeowners, and particularly at-risk borrowers, are growing more satisfied with the companies that service their mortgages, according to J.D. Power's annual look at the mortgage servicing industry.

The study found that overall satisfaction with the way that companies handle billing, payment processing, escrow accounts and their websites and phone contact rose for the second consecutive year.

Improved measures of satisfaction were highest, though, among borrowers who were behind on their payments or worried about falling behind during the next year.

To some extent, the improvement is due to various federal and state rules put into place as a result of the housing crisis. But Craig Martin, director of J.D. Powers' mortgage practice, said the change isn't just the result of regulation, or of company altruism.

Rather, it's the reality that loan servicers are more caretakers than rainmakers, so the bottom line benefits come from making sure once a loan has been originated, it is handled efficiently. Servicers are making it easier for customers to use corporate web sites and smart phones to make payments and resolve issues, according to Martin.

"They're trying to reduce cost," he said. "The business has been done. How do you make more money? Really the answer is fewer problems, fewer calls. If you can service more people with fewer humans and fewer calls, that's good for the customer and good for the firm."

Topping the list of rankings of mortgage servicers was Quicken Loans, which has dramatically boosted its servicing portfolio in the past two years. Other servicers in the top five were Chase, Regions Mortgage, Wells Fargo Home Mortgage and BB&T.

At the other end of the spectrum were Ocwen Loan Servicing, Nationstar, and Green Tree Servicing, three non-bank entities that have grown mightily through the acquisition of loan portfolios from traditional bank lenders.

Their positions on the bottom of the list don't surprise Martin, who noted that big-bank servicers have sold off the more challenging loans in their portfolios to these companies to handle.

"Historically that (customer) group is going to be less satisfied," Martin said. "If I am late, delinquent, having trouble making payments, I'm going to be less satisfied with my servicer. They're handling much more complex problems."

J.D. Powers' annual study looked at responses from 5,120 customers who were surveyed in April and May.

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Original headline: Homeowners increasingly satisfied with mortgage servicers, study says

Source: (c)2014 the Chicago Tribune

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