Every week, I talk to loan officers who've been chastised by a customer over the glacial pace of their loan approval process, or because somebody in processing misplaced a document and the customer has been told they need to upload it again, or they have been told that the 27 documents they've already supplied now show that they need to supply a 28th in order to have their loan approved.
These same loan officers are quick to point out that the vast majority of their clients are happy with their service and appreciative of their help in getting their mortgage financing approved.
But the latest JD Power & Associates survey of mortgage customer satisfaction (the J.D. Power 2016 U.S. Primary Mortgage Origination Satisfaction Study,SM ) shows that:
If you work in this industry, you know that documentation requirements are much more stringent than they were before 2009. You also know that these requirements, and new regulations like TRID, have combined to make the loan approval process more complex, lengthier, and more expensive for consumers -- the regulatory costs imposed by Dodd-Frank and TRID alone have added thousands of dollars to the cost of every loan, and that cost is passed on to the consumer, along with most of the additional paperwork burden. And none of these changes have done anything to make it easier for a consumer to compare the costs of competing loan options or competing lenders.
But maybe the most frustrating thing for consumers about the post-2009 purchase mortgage lending experience isn't the intrusive documentation requirements, or the fact that they're often being asked to go online and complete their own loan applications, or even having to pay $,2000+ extra for the privilege. Certainly consumers have a valid complaint that the industry has done little or nothing to make loan pricing comprehensible, but maybe the purchase customer's biggest gripe is the stress of never being sure you can trust your lender to do their job in time for you to meet your obligation to close by the contract deadline.
Why should we expect our customers to be happy about that?
It's not a question of blame or fault. I'm sure you didn't cause the financial meltdown of 2008 or the ensuing regulatory dystopia, and the company you work for probably didn't cause it either.
But neither did your customers!
And that's my point. When originators think about competing in today's lending environment, they tend to think about ways to generate more leads, or to reduce the time they spend managing their pipeline. Very few originators concentrate first on how to improve their customer's experience. If you can save a half hour of your time by sending a customer to a website to complete an application, that's a win for you even if it means your customers end up spending an hour of their time cussing you out and wondering why they have to do your job for you. Are there customers who would rather fill out their own application? Sure, and we should accommodate them, but not at the expense of the customer who prefers the human touch, or doesn't know whether they want a conventional or FHA loan yet, or doesn't want to have to guess whether the "Monthly income" box is asking for gross or net income.
Maybe it would be helpful to do a thought experiment:
These same loan officers are quick to point out that the vast majority of their clients are happy with their service and appreciative of their help in getting their mortgage financing approved.
But the latest JD Power & Associates survey of mortgage customer satisfaction (the J.D. Power 2016 U.S. Primary Mortgage Origination Satisfaction Study,SM ) shows that:
- 1 out of every 5 customers (21%) who closed on a purchase mortgage last year regretted their choice of lender.
- 27% of first-time homebuyers wished they hadn't picked the lender who handled their mortgage.
- Satisfaction scores from customers who had just gotten a refinance loan were significantly worse than for customers who had completed a purchase transaction.
If you work in this industry, you know that documentation requirements are much more stringent than they were before 2009. You also know that these requirements, and new regulations like TRID, have combined to make the loan approval process more complex, lengthier, and more expensive for consumers -- the regulatory costs imposed by Dodd-Frank and TRID alone have added thousands of dollars to the cost of every loan, and that cost is passed on to the consumer, along with most of the additional paperwork burden. And none of these changes have done anything to make it easier for a consumer to compare the costs of competing loan options or competing lenders.
But maybe the most frustrating thing for consumers about the post-2009 purchase mortgage lending experience isn't the intrusive documentation requirements, or the fact that they're often being asked to go online and complete their own loan applications, or even having to pay $,2000+ extra for the privilege. Certainly consumers have a valid complaint that the industry has done little or nothing to make loan pricing comprehensible, but maybe the purchase customer's biggest gripe is the stress of never being sure you can trust your lender to do their job in time for you to meet your obligation to close by the contract deadline.
Why should we expect our customers to be happy about that?
It's not a question of blame or fault. I'm sure you didn't cause the financial meltdown of 2008 or the ensuing regulatory dystopia, and the company you work for probably didn't cause it either.
But neither did your customers!
And that's my point. When originators think about competing in today's lending environment, they tend to think about ways to generate more leads, or to reduce the time they spend managing their pipeline. Very few originators concentrate first on how to improve their customer's experience. If you can save a half hour of your time by sending a customer to a website to complete an application, that's a win for you even if it means your customers end up spending an hour of their time cussing you out and wondering why they have to do your job for you. Are there customers who would rather fill out their own application? Sure, and we should accommodate them, but not at the expense of the customer who prefers the human touch, or doesn't know whether they want a conventional or FHA loan yet, or doesn't want to have to guess whether the "Monthly income" box is asking for gross or net income.
Maybe it would be helpful to do a thought experiment:
- How would you like it if your doctor asked you to conduct your own physical?
- Or if your mechanic handed you a toolbox, pointed to an empty bay, and told you to do your own oil change and tune-up?
- How do you like using those automated self-checkout stations at the grocery stores -- you know, the ones that can only properly scan about 80% of your items? (At least the supermarkets still provide human checkout lanes for those who prefer them -- for now).
RSS Feed