Rocket returns to top of customer satisfaction survey

Rocket Mortgage regained the top spot among mortgage originators for customer satisfaction, but this year’s scores, especially at the top of the list are tightly bunched, J.D. Power found.

Originators are struggling to differentiate themselves from the competition at a time when, more so than ever, rate is what is on the mind of homebuyers, said Craig Martin, executive managing director and global head of wealth and lending intelligence at J.D. Power.

In fact, the difference between Rocket Mortgage at 750 and Freedom Mortgage, the bottom of the 21 companies officially scored this year, at 663, was only 87 points, a sign that the business is becoming commoditized.

“When we think about commoditization, some people will take that as, ‘oh, it’s bad service,'” Martin said. “And that’s actually not the case in my mind.”

Instead what’s happening in the mortgage industry is what’s been taking place in wealth management, another area that Martin tracks.

Commoditization as seen in wealth management means that all the companies are delivering the same core experience to the customer.

“It’s very functional, it delivers the needs,” Martin said. “But I think if you really want to differentiate, it has to be something more substantial than that, it can’t just be good.”

Right now, mortgage lenders have to offer low rates to compete, but if their turn times are three times longer than the originator down the street, the borrower isn’t going to come back — and that’s if they decide to follow through on their application in the first place.

“Once those basic needs are met, then what’s next, what’s really the standout and I think that’s the nature of the commoditization that we’re seeing,” Martin said.

His suggestion to lenders and loan officers: become that financial advisor throughout the transaction, not just be someone taking an application.

“If you’re in a competitive situation, and it’s close [on rates], that advice, that guidance helps really stand out, and I think that’s going to truly, especially in these conditions, be the difference between winners and losers,” Martin said.

The lenders ranked between second and eighth — Chase, Citi, Fairway, PNC, Ally, Bank of America, Guaranteed Rate and last year’s leader Guild — are separated by just five points, between 731 and 736; because of a methodology change by J.D. Power, this year’s scores are not comparable to prior years. The industry average score was 716.

The redesigned survey measures overall customer satisfaction based on performance in six factors: communication; digital channels; level of trust; loan offering meets my needs; made it easy to do business with; and people. It was conducted between June and August and is based on responses from 5,915 customers who originated a new mortgage or refinanced within the preceding 12 months.

(A trio of military-focused mortgage originators, USAA at 797, Veterans United at 768 and Navy Federal Credit Union at 760 all topped Rocket but are not eligible to be ranked because of the limited market they serve.)

The tight scores were not much of a surprise to Martin. “In some ways, it’s a commentary on the industry and people are delivering a really strong experience.”

The biggest brands have invested in technology for many years and the others are catching up.

Still, customers are seeking expertise, guidance and communication, in the form of responsiveness, and delivering messages consistently. Currently, just 28% of lenders are successfully meeting all these key criteria.

“While the overall scores in our model are very similar, what we do see at a brand level, how they get there can be a bit different,” Martin added. The model picked up variations in how easy the process is, how well they communicated the terms of the product and how well the product met their needs.

Brand image can play a role, in terms of how a stressed originator — one that might be worrying about their job — interacts with the customer.

“It impacts communications and impacts their focus,” Martin said. “And so all those things start to percolate and show up in a customer’s experience.”

In 2021, Better.com ranked seventh and scored eight points above the industry average. This year, the much-maligned company, whose CEO Vishal Garg was roasted for how he conducted a December layoff, was 15th, with a 697 score, 19 points below the average.

Even though the survey period ended months ago, several companies, at the lower portion of the list, besides Better and Freedom, have laid off large numbers of staffers. These include: PennyMac, ranked 16th; Amerisave, 19th; and Mr. Cooper, 20th.

The J.D. Power data revealed that lenders cannot coast on providing a great experience in just one part of the mortgage process; having the best online application isn’t enough. It’s the entirety of the customer journey and lenders need to make sure each step is executed effectively.

“This is what lenders are going to find is if you want to stand out, you have to put it all together,” Martin said. “It’s got to be a complete end-to-end experience that’s great and that will resonate that will create dramatically different, not just satisfaction, but loyalty and retention and long-term lifetime clients that that a lot of these firms are looking for.”