Over the course of 2016, borrower satisfaction dropped and lenders sought more changes to their post-TRID underwriting practices, according to the February Stratmore Group Insights report.
Borrower satisfaction, which measures customer exeriences through the mortgage lending process, dropped to an index of 88, after a four-moth run at 90, Stratmore reported. That was the lowest number since January 2016.
“It seems clear that time-off during the Holiday season took its toll on borrower satisfaction,” the report stated. “We anticipate a recovery by February, as occurred during 2016.”
Last February’s borrower satisfaction index hit 89.5.
Overall borrower satisfaction accounting for roughly 105,000 loans in 2016 was 89. According to Stratmore, 82 percent of borrowers reported experiencing no problems. They reported satisfaction scores of 95.
Of the 18 percent who did experience a problem, 13.4 percent said the problem was resolved, with 4.7 percent reporting that the problem was not resolved. The satisfaction score plummeted to 77 for that 13.4 percent and to 35 for the 4.7 percent. This, the report stated, put lender “at risk to getting negative reviews by such borrowers to friends, relatives, and on social media.”
According to the report, banks and underwriters were more likely to originate‒‒or more likely to plan to originate‒‒non-QM loans in 2015. Fifty-six percent of banks responding to Stratmore’s survey said they were significantly more likely to originate non-QM loans than independents (41 percent). This difference, Stratmore reported, “reflects the ability of banks to internally fund non-QM loans, e.g., Jumbo ARMs.”
Lenders also shifted how their employees worked. Two thirds of lenders, for example, offer work-from-home options as a recruiting incentive or as an incentive to retain seasoned underwriters.
“This practice is often used when the talent pool has been exhausted in a particular geography or as a way to quickly expand or contract capacity in line with demand,” the report stated.
The typical compensation package for processors salary in 2015 was just shy of $38,000 to $56,000. The upper 10 percent of earners made about $73,000 that year. Third-party originators (TPOs) were least likely to pay processor incentives (75 percent).
“For a TPO lender, the role of processor tends to be more of a consolidator role versus the retail processor,” Stratmore reported. “Because the TPO lender is often receiving more complete files, the emphasis on productivity is diminished and may lead to a lower incidence of incentives.”
Processor incentive was primarily based on a per loan payout (65 percent), the report stated. Another 22 percent of the incentives were based on the achievement of pre-defined objectives.
“These objectives might include file quality, team performance, and customer satisfaction,” Stratmore reported. “These drivers … indicate that lenders care about throughput and productivity, but also care about file quality, team performance and other lender specific objectives.”