Lenders must improve the customer experience—especially if they want to increase purchase originations and grow in the face of declining refinance activity, a recent STRATMOR Group Insights Report revealed.
According to the report, low borrower satisfaction, delayed closings, and other factors can have a significant impact on a lender’s competitive edge.
“In a slower growth environment that relies more on purchase originations, the winners are going to be those lenders that are able to steal market share from their competitors—and the key to doing that is having a strong focus on borrower satisfaction,” said Garth Graham, Senior Partner at STRATMOR Group. “While pricing will continue to be a factor in lenders’ ability to compete, providing borrowers with a superior customer experience will play a much more significant role than ever before.”
A huge part of why the customer experience is so important? Graham said it’s social media.
“One reason customer experience will be key to competing going forward is that prospective borrowers have more convenient and widespread access to lenders’ customer experience ratings via social media and online sites that enable borrowers to rate their lender experience,” he said.
In its Insights Report, STRATMOR outlined what it called the “Seven Commandments for Achieving Borrower Satisfaction.” A detailed how-to on pleasing today’s mortgage borrower, the commandments tell lenders to: provide up-front checklists to customers, get in touch well before closing, avoid asking for redundant documents, keep customers informed throughout the process, and close on time, among other things.
“While these commandments are not surprising,” Graham said, “what may be surprising is the hit that lenders take on borrower satisfaction levels and the potential reputational damage they face when they fail to adhere to one of more of the commandments. With borrower experience so easily shared online these days, lenders striving to outpace the competition will need to intensely focus on these commandments.”
Case in point: STRATMOR’s monthly MortgageSAT borrower satisfaction survey recently showed that delayed closings severely affect borrower satisfaction scores. For example, borrowers with refinance loans that closed 15 or more days late reported a satisfaction score of just 73.
Read the full Insights Report at STRATMORGroup.com.