The sharp rise in mortgage rates last October cut into consumer satisfaction with their lender, leading to a 3-point year-over-year decrease for the industry, J.D. Power said.
The drop in the 2024 survey industry average of 727 followed a 14-point gain between 2022 and 2023 to 730.
However, a look at the trending data finds the scores have improved in recent months; that view is the result of a change in methodology where it is now collecting information throughout the year, explained Bruce Gehrke, senior director of wealth and lending intelligence, in an interview. The timeline is September through September.
Thus when
The changing environment has been a "double-edged sword," he said. The strong increase in overall scores in the 2023 survey came as mortgage lending was transitioning from a refinance market to a purchase market dealing with those higher interest rates.
But "the impact hadn't really settled in yet" when
"We saw that in the data as well as in turnaround times and things of that nature," Gehrke said. "But now, the lenders have adapted to this volume level, they've got their staffing corrected, and they're doing a good job of dealing with that customer."
That was borne out in the data from the latter half of the year.
While those higher rates drove satisfaction down at first, each new quarterly wave of data showed improvement, to the point where the scores are now.
For example, lenders looked to right size their staffing, and some initial confusion in operations resulted from these changes.
The surveys also found that first-time home buyers had higher satisfaction scores than repeat customers.
"What that's telling us is, those folks that are coming in, the lenders are doing an excellent job of dealing with them, answering questions, guiding them through the process," Gehrke said. "Repeat borrowers are saying, 'this is a lot different than it was,' so they're a little less satisfied going forward."
The
J.D. Power identified the factors causing the biggest year-over-year declines in customer satisfaction. Consumers identified digital, which is down 8 points; communications from their lender, down 5 points; and having a loan offering that meets my needs, also down 5 points from 2023.
On the other hand, when a lender's local brand representatives are directly involved in the mortgage origination process, overall satisfaction rose 40 points.
Having loan officers who are able to demonstrate their expertise also contributed to higher scores. Borrowers who were able to strongly rely on their lender's expertise to get through the process gave an average 133-point higher score versus those that felt the opposite.
What those scores reinforce to J.D. Power is that consumers want people from their lender to act in an advisory capacity to them more than they have in the past, Gehrke said.
When it comes to individual lender scores, another realignment has taken place as for the fourth consecutive year, a different originator is on top of the rankings.
Leading the 2024 survey was Prosperity Home Mortgage, which scored a 772, followed by Movement Mortgage with a 761 and Bank of America at 760.
In 2021,
The next year Rocket regained the top spot, but Fairway Independent Mortgage supplanted it in 2023.
This year Rocket ranked sixth, Fairway seventh and Guild was 13th.
Of the 22 lenders on whom J.D. Power received enough responses to give a score, Pennymac ranked last at 652. Next was Mr. Cooper at 659 and CrossCountry at 663.
Veterans United Home Loans, which serves a limited market and thus does not meet ranking criteria, scored what otherwise would have been the highest at 793. Navy Federal Credit Union received a 748 score.
However, in the
