Rocket falls from first place in J.D. Power servicer survey

For the first time in nine years, Rocket Mortgage is not the highest rated mortgage servicer on the J.D. Power’s newly redesigned customer satisfaction survey.

The highest scoring servicer on the 2022 U.S. Mortgage Servicer Satisfaction Study is New American Funding at 695; it did not generate sufficient responses to be included in last year’s results.

Rocket, which had previously been dislodged from its long-time top spot in the 2021 U.S. Primary Mortgage Origination Satisfaction Study by Guild Mortgage, slipped to No. 2, at 672, while Huntington National Bank remained third at 669. Guild fell to No. 6 this year from second on last year’s servicer survey.

“The study underwent a substantial redesign, including a new scaling method, so it’s not possible to compare 2021 to 2022 scores,” said Craig Martin, executive managing director and global head of wealth and lending intelligence at J.D. Power. “But my general read on the metrics that are similar is that satisfaction has remained relatively stable and that the relative ranking positions of firms was fairly stable.”

The survey average score was 607. USAA at 760 and Navy Federal Credit Union at 746 actually scored higher than New American, but are not placed in the rankings by J.D. Power because of their limited customer base; they are both membership organizations concentrating military families and veterans.

The lowest two scorers from 2021, Shellpoint at 31st and PHH Mortgage at 30th, remained at the bottom. Cenlar slipped to 29th overall, while LoanCare was 28th.

“Even for firms primarily focused on subservicing — an area where compliance, efficiency and resource optimization are paramount — it’s critical to realize that customer perceptions heavily influence actions and, as a result, affect the bottom line,” said Martin.

In June, LoanCare laid off an undisclosed number of workers.

But the big issue J.D. Power found from the survey results was an erosion of trust between consumer and servicer.

“In a time when brand reputation, customer trust and customer satisfaction are going to be even more critical for attracting and retaining business, different business models will be put to the test in different ways,” Martin said. “Managing to the average is dangerous. Firms that are selling the value of the end-to-end relationship and working to build customer advocates will not succeed if they are satisfied with only being technically proficient.”

A number of independent mortgage bankers are marketing mortgage servicing rights portfolios in order to bolster their finances. But selling the MSRs impacts both customer satisfaction and trust, the survey found.

The average satisfaction score for mortgages that are originated and serviced by the same company is 646 (on a 1,000-point scale). That drops to 513 if the originator transfers the MSRs to another party.

Likewise, customer trust in the mortgage servicer is 145 points lower at 511 when a loan is transferred.

And selling the MSR hurts the original lender. Just 15% of those customers whose rights were transferred said they were “very likely” to use that first lender for their next mortgage.

The actual transfer process did not receive high marks from borrowers.

More than four in 10 borrowers that had a servicer change claimed the transfer process was not “very easy.” When the consumer rated the shift as very easy, the satisfaction score was 183 points higher than when the process was rated as “somewhat easy,” “somewhat difficult” or “very difficult.”

The difference is transparency and communication. Customers responded favorably to brands that provided clear guidance on what is happening with their account and why.

“The complexity of the mortgage industry creates challenges in customer understanding, particularly when it comes to mortgage transfers”, said Tom Lawler, head of consumer lending intelligence at J.D. Power. “We’re entering a market environment where customer satisfaction is going to play a critical role in the success of mortgage brands, and transparency will be a big part of creating the trust that will determine business success.”