Homeowners with Unaffordable Mortgage Rates Becoming Frustrated with Inability to Refinance.
Overall approval with primary mortgage servicer providers has gone down hill considerably from 2010, as dissatisfaction is still mounting among homeowners who took out their loans during the height of the runaway housing market, in a report by J.D. Power and Associates the 2011 U.S. Primary Mortgage Loan Servicer Satisfaction Report (SM) recently released. Additionally, mortgage servicing companies brand perception has deteriorated resulting from negative media coverage over reported abuses inflicted towards homeowners by mortgage service companies.
The report shows that general approval of primary mortgage loan servicers has slipped down to 718 from a scale of 1,000 points, off a full 29 points from a report of 747 in 2010. The report shows customer approval within four general areas of mortgage loan servicing which includes: escrow account administration; billing and payment processing; website; and telephone contact. Satisfaction has decreased from each of the four aspects from 2010.
The report also shows that pleasant service and dependability are the most significant facets of overall brand impression for mortgage loan servicers. These key ingredients are also have become the two gauges that have most notably
deteriorated in 2011, compared to 2010. In addition, borrowers who still have loans that were taken out before 2009 are much less pleased in 2011 than when they were back in in 2010.
"Many of those borrowers who are still living with home mortgages that were taken out from 2006 to 2008 as those home values were at their peak and credit requirements were the most laid back would now like to refinance, although they canít because either they have low equity in their homes because of falling home values or their credit scores doesnít meet the
strengthened standards of today," says David Lo, financial services director of J.D. Power and Associates.
This has turned into increased frustration for borrowers and a big contribution to their frustration," said Lo. "They are cannot even benefit from historic low interest rates. The
dilemma for lenders and lawmakers is finding a way to assist not only those borrowers at risk of defaulting, but also this growing
dissatisfied group of borrowers who are trapped in unfavorable term loans and are unable to get out of them."
According to Lo, helping to diminish the effects of the current economic facets and harmful brand image satisfaction opinions, it is imperative for mortgage loan servicers to provide operational excellence and effective, proactive, borrower communication. Specifically, key steps that mortgage loan servicers can do to help assess frustration including helping borrowers understand how their impound accounts are calculated; effectively taking care of recent borrower contacts; ensuring borrowers have a stress-free encounter; and clearly discussing the loan servicerís fee structure. Among mortgage loan servicers that consistently take care of all of the best practices that apply set out in the report, satisfaction averages 810ó. Quite a bit more than the industry wide average of 718. On the other hand, approval averages just 660 among mortgage loan servicers that do these best practices just 41 to 60 percent of the time.
"Excellence in mortgage loan servicing centers around making these problems smaller while quickly and
effectively addressing them and when they come up," says Lo. "Mortgage Servicers that shine in these areas have the advantage of increased consideration ratios for new mortgage loans and other goods, more referrals, and a more positive brand perception."
Branch Banking & Trust comes in highest in borrower satisfaction among all primary mortgage loan servicer providers for a second year in a row, scoring 768. BB&T particularly shines in the billing, payment processing and escrow accounts administration facets. Regions Mortgage is number two in the rankings scoring 757, whereas Wells Fargo is number three with 755.
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