Other mortgage lenders could learn a lot from Quicken Loans Inc., which has managed to grow into one of the largest mortgage lenders in the country while keeping its customers happy. Among all lenders, digital documents in the closing process improves satisfaction.
Five years ago, Quicken originated just $12 billion in home loans, according to mortgage production data maintained by Mortgage Daily.
Fast forward to this year, and the Detroit-based firm is on a pace to close more than $80 billion in residential loans.
In Mortgage Daily’s third-quarter 2013 ranking of lenders, Quicken was No. 5.
Yet despite its rapid ascension, Quicken has maintained top-notch customer satisfaction.
In the J.D. Power 2013 U.S. Primary Mortgage Origination Satisfaction Study, which was released Thursday, Quicken was the top-rated lender.
In fact, it was the fourth year in a row that the online lender has dominated the list.
Quicken’s score in the study was 841 on a 1,000-point scale, rising from 817 in the 2012 study.
A report earlier this year from Standard &Â Poor’s Ratings Services noted that loan processor functions at Quicken are broken up into components separately completed by between 25 and 30 people on each file.
The industry as a whole also saw an improvement, with an overall customer satisfaction score of 771 versus last year’s 761 score.
It was the third consecutive year of improvement and the highest score in seven years.
The score reflects customer satisfaction with the application/approval process, their loan representatives, the closing, and contact with the company.
J.D. Power conducted the survey starting on July 30 and finishing up on Aug. 30. Responses were collected from 3,267 borrowers who closed on a mortgage or refinance during the prior 12 months.
What’s interesting is that refinance borrowers were more satisfied than those who obtained purchase financing, with the refinance satisfaction score coming in 10 points higher at 775. J.D. Power attributed this to refinance customers who are more familiar with the process.
“Despite improvements, customers purchasing a home, particularly first-time home buyers, continue to experience difficulties understanding the loan options available to them,” the report said. “In the 2013 study, 61 percent of first-time home buyers indicate that their loan representative clearly explained their options and that these options were completely understood, compared with 74 percent of repeat home buyers and 81 percent of refinancing customers.”
But Craig Martin, director of the financial services practice at J.D. Power, said that as refinance volume diminishes — lenders will become more hungry for purchase business.
Martin said that lenders need to address the special needs of first-time homebuyers in order to distinguish themselves from the competition.
Borrowers who closed their loans using electronic documents had a satisfaction score of 830 — 58 points higher than for borrowers who closed with traditional printed documents.
J.D. Power noted that 17 percent of first-time homebuyers were hit with additional fees at closing versus 8 percent for repeat homebuyers and 7 percent for refinancers.
Among the 13 lenders rated in the survey, No. 2 was Branch Banking &Â Trust Co. with a score of 798.
U.S. Bankfollowed with a 783 score, then 778 at PNCÂ Mortgage and 773 at JPMorgan Chase &Â Co. Chase.
At the bottom of the list was PHHÂ Mortgage Corp., which garnered a score of 724.
The country’s biggest lender, Wells Fargo Home Mortgage, was near the industry average with a score of 768.
