JD Powers and Associates has released their 2006 Primary Mortgage Origination Study and have come out with some interesting observations. The key ones that I picked up were that relationships with a mortgage broker were almost as important as interest rate. Also, a high percentage of borrowers did web research on the companies supplying the loan before they made a decision.

Some of the findings by JD Powers on the mortgage industry include:

• The speed in which customers receive final approval for their loans is a critical influence on overall satisfaction. Two-thirds of customers say they received final approval for their loans less than one week after completing their applications. Satisfaction drops nearly 100 points among customers who waited seven or more days.
• Satisfaction levels decrease significantly among mortgage customers who are asked to provide additional information and documentation after submitting their completed loan application. Fifty-six percent of these customers complain that they were asked to produce additional information more than once, further impairing overall satisfaction.
• Not surprisingly, decisions regarding cost (interest rates, fees, closing costs) are a driving reason for selecting a mortgage lender (28%). However, customers also indicate their previous or existing relationship with the lender as a strong motivator (17%).
• Refinanced mortgages account for 45 percent of all recently originated primary mortgages. Nearly 70 percent of those refinancing choose their current lender. These customers record satisfaction scores 35 points higher than those who choose a new lender.
• The Internet plays an important role in the mortgage shopping and application process. More than 40 percent of recent borrowers visited a mortgage lender’s Web site or an online third-party service to gather information. While customer satisfaction is highest when borrowers deal with their lenders in person, customers managing the process online are more satisfied than those interacting with a person over the phone. via Originator Times.

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