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Survey Shows Room for Mortgage Business Expansion at Banks

Banks may be missing out on an opportunity to expand their mortgage business by a substantial portion, according to a consumer mortgage study conducted by ""Carlisle & Gallagher Consulting Group"":http://www.cgcginc.com/ (CG).

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The group conducted a survey to gauge consumer thoughts on their concerns about the mortgage process and what kind of features would attract their business; it also announced it is hosting a ""webinar"":https://www306.livemeeting.com/lrs/1100005398/Registration.aspx?pageName=715lb25wjgsp3zcp November 15 to discuss the findings.

The survey showed 39 percent of respondents have their mortgage with their primary bank (the bank with which they conduct most of their business), while 70 percent would prefer to have their mortgages with one of their major banks. CG said that gap may represent an opportunity for a 79 percent increase in business.

What's more, when asked if they would be willing to pay more on their mortgage if it went through their primary bank, 39 percent responded positively.

According to the survey, cost is the biggest factor for consumers when it comes to new mortgages and refinancing-84 percent rated cost as one of the five most important factors in the mortgage process.

Customer service was another major factor (rated in the top three). A little more than a third of consumers said they would be willing to pay more for a mortgage if the customer service experience was top-quality.

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Of those respondents, 52 percent said they would pay more just to be able to complete the process more easily.

As far as consumer complaints go, high interest rates, high payments, and taxes and escrow are the top three most frustrating issues regarding current mortgages. The slow process was another concern, with 56 percent of consumers saying slow execution is one of the most painful aspects about applying for a mortgage.

Other complaints were related to customer service: Untrustworthy advice was a problem for 26 percent of consumers, while 32 percent said their lender was difficult to communicate with. Nearly a third said it was too difficult (or impossible) to track the status of their mortgage application.

Tom Mataconis, VP of consulting at CG, said the survey results paint a clear picture of how lenders can improve their business.

""Banks must align to customer values to win mortgage market share,"" Mataconis said. ""CG believes that banks who focus on trust and customer service as differentiators will gain market share in the new normal. Low cost is simply table stakes.""

In other areas, the idea of industry regulation doesn't have many consumers excited, it seems: Only 23 percent of respondents believe regulatory changes will have a positive impact on their next mortgage, while the remainder believe changes in regulation will have a negative impact, if any, on the process.

The survey also showed some optimism for the housing market. Only 4 percent of respondents expect housing values to decline over time, while 46 percent expect their home values will grow significantly and should deliver ""significant financial return."" More than half of respondents still consider their home to be their most important investment, especially those whose family incomes are under six figures.

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