J.D. Power and Associates released a new study of customer satisfaction for primary mortgage borrowers in the U.S. The study revealed some interesting reasons for satisfaction or non-satisfaction with a mortgage originator.
Homeowners ranked USAA Federal Savings Bank the highest in customer satisfaction when it comes to the service of a primary mortgage, according to the survey.
The customer satisfaction was calculated in four areas: the administration of the account, the billing process, the payment process and the process of contacting the mortgage servicer.
“USAA Federal Savings Bank is simply doing things right and doing them right the first time,” said Rocky Clancy, the executive director of the mortgage practice for J.D. Power and Associates. “When USAA makes commitments to their customers, they meet those comitments. Customers will forgive mistakes, but they tend not to forgive broken promises. Problems are inevitable, but having a proper approach to those issues can speak volumes.”
The study revealed that around 45% of mortgages do not remain with the originator for servicing after the mortgage is closed. Those consumers with outsourced mortgages on average have satisfaction score of 32 index points lower.
“While this is a common practice in the industry, removing the homeowner from the decision to sell the mortgage to a different company for servicing can create confusion and a sense of betrayal among customers,” explained Clancy.
“Customers want stability and consistency with their home loans, and lenders who can deliver those are rewarded with customers who are not only more satisfied and loyal, but also have twice as many additional products with the lender.”
Fifty percent of customers pay their mortgage bill electronically, a surge from the 34% in 2004. The study revealed that electronic payments result in a higher customer satisfaction level overall.
“The more billing and payment of mortgages is automated or conducted online, the more consistent and accurate loan servicing becomes, ultimately leading to higher levels of customer satisfaction,” said Clancy.
“The bottom line is that satisfied customers require less contact with their servicer’s customer service department, resulting in lower servicing costs for the lender.
“In addition, mortgage servicers who are successful in satisfying their customers can expect greater revenue as a result of customers recommending the company to others more often, and obtaining additional non-mortgage services from the lender.”
The study was based on responses from 12,799 homeowners between March and April of 2006. The top ten mortgage servicers according to satisfaction ranking were:
- USAA Federal Savings Bank
- BB&T
- Citizens Bank
- GMAC Mortgage
- Wells Fargo
- Bank of America
- First Horizon Home Loans
- CitiMortgage
- SunTrust Mortgage
- Fifth Third Bank
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!
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Interest rates for fixed-rate, 30-year home mortgages are likely to hold below 7% for the rest of the year, according to mortgage giant Freddie Mac.
Chief economist for Freddie Mac, Frank Nothaft, said in an interview on Monday in Washington that 30-year rates will likely continue to rise in the upcoming months, but shouldn’t go past 7%.
Nothaft said that long-term interest rates could even fall and will probably not hit 7% until the second half of 2007.
Freddie Mac was established by Congress in 1970. The company buys residential mortgages from private lenders and packages and sells them on the securities market. This process replenishes the nation’s supply of home loan money.
Interest rates on a 30-year, fixed-rate mortage currently average 6.79%, according to Freddie Mac.
The housing market has been experiencing a slowdown, partly due to the increases in interest rates. Homes are staying on the market longer, and with a larger inventory, some areas are experiencing price stability or depreciation. With houses becoming less costly, more buyers could enter the arena, giving the market a soft landing that experts are looking for.
Michele Joy of KB Homes said that when interest rates are below 7% it is a “great time to buy.”
“It’s great news for the market,” she said. “It’s really good for the overall affordability index.”
Experts recommend fixed-rate mortgages to most consumers. With a fixed-rate loan, the risk is minimized as monthly payments stay the same throughout the term of the loan. Rising and falling interest rates do not affect the current loan.
With stabilizing interest rates, and the risk of increases still looming, many experts predict that homeowners with adjustable-rate mortgages will refinance for a fixed-rate mortgage.
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!
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Mortgage applications fell by 4.6% last week, according to the Mortgage Bankers Association.
When compared to one year ago, mortgage applications are down 31.3%. The purchase index has declined 6.2%, to 19% lower than last year at this time. The refinance index fell 1.6% last week, 46% lower than last year.
The decline in purchase applications has been steeper than the drop in U.S. home sales. New-home sales have fallen by 6% for the year. Existing home sales are down by 7%.
Refinancings made up 35% of total applications for last week, only up slightly from 34% the week earlier. Compared to the refinancing boom of 2003 when refinancings accounted for over 80% of applications, the refinancing market is down.
Adjustable-loans made up 29% of total applications.
Mortgage rates decreased to a four-week low last week. The average rate on a 30-year fixed-rate mortgage was 6.73%, down from 6.81%. The 15-year fixed-rate averaged 6.38%, down from 6.40 the week prior.
Adjustable-rate mortgages also saw declining interest rates. A one-year ARM fell to 6.28%, down from 6.41% the week prior.
The MBA data was released after an industry survey showed that the confidence of U.S. home builders fell in July to a 14-year low. Home builder confidence dropped three points to 39 for July, according to the National Association of Home Builders on Tuesday.
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!
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