Only 10% of American consumers demonstrate true loyalty to their current home mortgage service provider, according to the 2003 Home Mortgage Study from JD Power and Associates.
The study defines the truly loyal customers as those who say they will definitely consider their existing mortgage provider again, and would recommend their provider to others, and are delighted with the level of service they currently receive.
"Being the first lender a customer contacts when shopping for a new loan is a tremendous competitive advantage," explained Jeremy Bowler, senior manager for JD Power. "With more than 7,800 lenders in North America offering to set up a new loan, it's very easy for customers to simply walk away from a mortgage provider that fails to meet their expectations."
Customer service is key
Customers who remain with the lender that originated their mortgage are far more satisfied than those whose mortgages have been resold to another lender.
Among the 31% of all customers who experience this abrupt transition to a new lender, only 17% say they would definitely consider using their new service provider for their next mortgage.
In such a competitive market, customer service is what differentiates providers, according to the report.
The four key factors that affect customer satisfaction, listed in order of importance, are: day-to-day administration of the account, billing and payment process, customer-initiated contact experience, and loan origination process.
Among the 27 home mortgage providers included in Datamonitor's study, USAA ranks highest in overall customer satisfaction. USAA scores higher than all other lenders in each of the four factors that impact overall satisfaction.
Branch Banking & Trust, Sun Trust, Wells Fargo and First Horizon follow USAA in the overall satisfaction ranking, respectively. Many smaller, often regional, lending institutions also performed well in the study.
"Smaller lenders often are able to provide their customers with more personal attention," explained Bowler. "But, with rapid consolidation taking place in the industry, there is a move to centralise the day-to-day servicing of mortgages. The challenge lenders face is to deliver the same quality of customer care, yet achieve the economies of scale many believe is necessary to remain competitive."