Mortgage servicers have improved overall client satisfaction this year by effectively overcoming the challenges of continuously high interest rates and financial instability, but there are still big hazards ahead.
The overall financial health of borrowers has sharply declined, and more and more borrowers are paying their bills after the due date, according to the J.D. Power 2024 U.S. Mortgage Servicer Satisfaction Study. However, mortgage servicer efforts to improve digital experiences and streamline problem resolution have helped drive incremental improvements in customer satisfaction.
“On the surface, mortgage servicers’ efforts to elevate their digital tools and customer service are offsetting challenging market conditions,” said Bruce Gehrke, Senior Director of Lending Intelligence at J.D. Power. “But digging a little deeper, the data shows early signs of potentially serious challenges for servicers in the future. A proverbial ‘canary in the coal mine’ is the financial health of borrowers, which has materially declined in the past few years. At the same time, most borrowers are facing rising escrow costs that result in their total monthly mortgage payment increasing. This means the industry has a growing number of at-risk customers facing higher costs, a group that tends to be a lot more expensive to service.”
Rocket Mortgage ranks highest among mortgage servicers with a score of 713. Regions Mortgage (678) ranks second and Chase (676) ranks third.
Key Findings of the 2024 Study:
- Controlling costs still a challenge: Self-service is key to keeping costs down. Although satisfaction with the look and feel of mortgage servicer websites and apps improves this year, borrowers say the phone is still the most likely customer service channel to drive a successful outcome and 29% of borrowers still considered this the easiest channel to use. Among those who had a problem, just 49% say their initial contact was calling customer service.
- Financial health of borrowers declines sharply: Just 41% of borrowers are currently classified as financially healthy, down from 46% in 2023 and 52% in 2022. Conversely, the percentage of at-risk borrowers is now 19%, up from 17% in 2023. Overall satisfaction scores among financially unhealthy borrowers are, on average, 117 points lower than among financially healthy borrowers.
- Escrow costs rising and borrowers need guidance: Escrow costs—the fees typically rolled into a mortgage to pay annual property tax and homeowners insurance bills—are rising nationwide, with 56% of borrowers experiencing an increase in escrow costs this year. Overall satisfaction is 62 points lower (on a 1,000-point scale), on average, among those who experienced an escrow cost increase than among those who experienced no change. Among those borrowers whose escrow costs increased, overall satisfaction is higher among those who say they had access to tools/information on escrow from their servicer than among those who say they were not aware of such tools.
- Overall satisfaction with mortgage servicers improves: The overall customer satisfaction score for mortgage servicers is 606, up 5 points from 2023. Improvements in problem resolution and satisfaction with digital channels are the primary drivers of this year’s higher scores.
To read the full report, including more data, charts and methodology, click here.
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