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Wachovia Ranks Highest in Primary Mortgage Origination Customer Satisfaction
Although the housing market has been in turmoil for much of 2007, most borrowers have not been negatively impacted and overall satisfaction across the mortgage lending industry has remained stable since 2006, according to the J.D. Power and Associates 2007 Primary Mortgage Origination Study(SM) released today.
The study, which measures customer satisfaction with four key factors of the mortgage origination experience -- application approval, interaction with the loan representative, closing, and problem resolution -- finds that overall satisfaction is 750 on a 1,000-point scale, and is consistent with 2006 results.
"While it's true that borrowers with weaker credit and those seeking larger 'jumbo' loans experience longer approval times and requests for more documentation, satisfaction has remained steady among the 75 percent of mainstream borrowers with good credit applying for moderately sized loans," said Tim Ryan, senior director of the mortgage practice at J.D. Power and Associates.
Wachovia ranks highest among primary mortgage lenders with a score of 827. Wachovia improves in a number of areas from 2006 results, particularly within the closing process. SunTrust Mortgage follows in the ranking with 818, while Bank of America (760) ranks third overall.
"The percentage of borrowers working directly with their lender instead of through a third party has increased, which has helped maintain the stability of overall satisfaction since 2006," said Ryan. "This has also contributed to the average borrower experiencing faster approval and closing times."
The study also finds that consumers can improve the quality of their experience when obtaining a mortgage by keeping the following guidelines in mind:

  -- Working directly with a mortgage lender instead of a mortgage broker or
     online service leads to a more positive experience when originating a
     home loan. Customers who work directly with their mortgage lender also
     experience fewer problems.

  -- Customers should expect -- even demand -- clear communication from the
     lender, particularly when it comes to being informed about the
     application process and managing expectations for the time it takes to
     acquire approval. Customers who are provided with a time frame for
     approval provide overall satisfaction scores that are 112 points higher
     on average than customers who do not receive a time frame. Similarly,
     customers who receive updates on the status of their loan provide
     scores that are an average of 209 points higher than customers who
     don't get this information from their providers.

  -- Having a clear understanding of the documents and information required
     by the lender -- such as bank statements, pay stubs, W2 forms, or tax
     returns -- can help prevent potential roadblocks for borrowers during
     the loan approval process. More than one-third of all applicants are
     asked to provide additional information after their application is
     submitted, which can delay the approval of the application. On average,
     delays caused by requests for additional information lead to a 95-point
     decline in overall satisfaction.

  -- Borrowers should ask their lender to ensure the accuracy of application
     and closing cost estimates as well as monthly mortgage payments. While
     70 percent of lenders provide an accurate estimate of what the monthly
     loan payments will be, 17 percent of customers are surprised with a
     higher monthly payment, which leads to a 159-point drop in overall
     satisfaction. Also, 12 percent of customers overall are surprised with
     additional fees during closing, which leads to a decline in
     satisfaction of more than 220 points.

The 2007 Primary Mortgage Origination Study is based on responses from 4,378 consumers who originated new mortgages between September 2006 and August 2007. The study also includes findings related to subprime mortgages, as respondents were asked to indicate their credit score range.

  Overall Mortgage Lender Satisfaction Ranking(Based on a 1,000-point scale)

  Wachovia                                             827
  SunTrust Mortgage                                    818
  Bank of America                                      760
  National City Mortgage                               759
  CitiMortgage/Citibank                                753
  Chase                                                752
  Industry Average                                     750
  Wells Fargo                                          749
  Countrywide Home Loans                               745
  GMAC Mortgage                                        744
  ABN AMRO Mortgage                                    740
  American Home Mortgage Corp.                         736
  WaMu                                                 733
  First Franklin                                       595

Web site: http://www.jdpower.com/