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54 | TH E M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T Missed Opportunity Why are customer satisfaction scores so low for mortgage servicers? D ue to their nature, most mortgage ser- vicers are not selected by their customers, and as a result, some of the lowest customer satisfaction and Net Promoter Scores (NPS) of any industry group studied by J.D. Power. The industry aver- age for overall satisfaction with mortgage servicers was 777 in 2019, just below life insurance (779) and above health plans (712) at the bottom of the indus- tries studied by J.D. Power. "Mortgage servicers are really missing an opportunity to build the kind of goodwill with their customers that has proven to translate directly to increased ad- vocacy and repeat business," said John Cabell, Director of Wealth and Lending Intelligence at J.D. Power. "The industry's laser focus on lowering costs, managing regu- latory compliance, and minimiz- ing delinquencies has come at the expense of customer experience. It is negatively affecting customer trust in their brands." The average NPS for primary mortgage servicers is 16, one of the lowest of any industry studied by J.D. Power. The study found that around 70% of customers do not have complete trust in their primary mortgage servicer. On the bright side, the study notes that "completely trust" their mort- gage servicer, customer satisfaction scores average 256 points higher, NPS is 69 points higher and customers are three times more likely to reuse the company for the purchase of a new home. Customers who were trans- ferred reported the lowest satisfac- tion, the study reports. Around 54% of first-time home buyers say they are confused, angry, or irritated when transferred. "This phenomenon spotlights the unique communications and customer experience challenges mortgage servicers still need to address with transferred custom- ers," the study notes. The survey named Quicken Loans as the highest-ranked mort- gage servicer for the sixth con- secutive year, with a score of 878. Regions Mortgage (848) ranked second, and Guild Mortgage (828) ranked third. Can They Face a Storm? A recent study revealed how prepared were homeowners in areas at a high-risk of storms. H omeowner attitudes in states at high-risk of hurricanes are yet to reflect any disaster preparedness according to a survey by ValuePenguin. The survey of 1,050 home- owners found that while 77% of respondents in hurricane-prone states said that they felt prepared for the hurricane season, nearly half of the respondents also said that they hadn't actually started making preparations. "At minimum, these numbers imply that one in four respon- dents from these high-risk states felt sufficiently prepared while having taken no protective mea- sures," the survey revealed. Homeowners are also underes- timating the cost of damage due to a storm or a hurricane, the sur- vey found. More than half of the respondents guessed that an aver- age home would require less than $10,000 in storm damage repairs. This underestimates the actual cost of repairs which averaged $91,735 for hurricane-related claims in 2017, according to the National Flood Insurance Program. Homeowners also believed that weather professionals exagger- ated "the risk level of incoming hurricanes." Almost four in ten homeowners believed this to be true, with two-thirds of respon- dents underestimating the number of hurricanes that could hit the country this year. One of the reasons the survey cited for homeowners underes- timating the losses from storm- related damages was the fact that many residents in these high-risk states didn't know how much insurance coverage would be needed to protect themselves from these damages. The survey found that in the 19 high-risk states 45% of respondents were unsure about the amount of insurance coverage they would need. According to ValuePenguin data, the average claims af- ter Hurricane Michael in 2018 stood at $57,754 while those after Hurricane Florence averaged $47,138. The highest claims pay- ments in recent years were made after Hurricane Harvey in 2017, where insurance claims averaged $116,823. "Mortgage servicers are really missing an opportunity to build the kind of goodwill with their customers that has proven to translate directly to increased advocacy and repeat business." — John Cabell, Director of Wealth and Lending Intelligence at J.D. Power