Consumer satisfaction with mortgage lenders is up for a third consecutive year and is at the highest level in seven years, according to the latest industry rankings from J.D. Power and Associates.

Quicken Loans earned the highest marks for customer satisfaction for a fourth consecutive year, according to the J.D. Power 2013 U.S. Primary Mortgage Origination Satisfaction Study, released today. Other top performers were BB&T (Branch Banking and Trust Co.) and U.S. Bank, while PNC Mortgage and JP Morgan/Chase also ranked above the industry average.

Overall customer satisfaction with mortgage lenders was ranked at a score of 771 on a 1,000 point scale, up from 761 last year and 747 in 2011. Rankings are based on reported customer satisfaction in four areas: application/approval process; loan representative; closing; and contact.

Refinancers, first-time buyers more satisfied

Borrowers who were refinancing their mortgages expressed slightly higher satisfaction with their lenders than those who were purchasing homes, 775 vs. 765, although that difference was attributed to refinancing borrowers' greater familiarity with the mortgage process. At the same time, first-time homebuyers expressed more satisfaction with their mortgage lenders than did repeat buyers, 772 vs. 757, respectively.

The overall decline in refinance activity over the past year has produced at least one benefit for homebuyers in that multiple lenders are now likely to be competing for their business and likely to be more accommodating of homebuyers' needs, according to Craig Martin, financial services practice director at J.D. Power.

"First-time buyers often have questions and should not be afraid to ask prospective lenders about the specifics of the mortgage process and how they will be kept informed," Martin said. "Much of the stress with borrowing comes from a lack of information and knowledge during the process."

A way lenders can stand out

Martin said first-time homebuyers in particular have special needs and priorities that, depending on how well a mortgage company addresses them, influence their level of satisfaction. He said meeting those needs is a way lenders may be able to stand out from their competitors.

Quicken Loans led all 13 major lenders covered by the study with a customer satisfaction rating of 841, compared to an industry average of 771. BT&T was second with a rating of 798, while U.S. Bank had a ranking of 783.

The lowest-ranking mortgage lenders covered by the survey were PHH Mortgage, Flagstar Bank and Bank of America, with scores of 724, 74 and 734, respectively. Other major lenders and their scores were: Wells Fargo, 768; Citibank, 764; SunTrust, 761; FifthThird, 756; and Provident Funding Associates, 752.

Published on November 19, 2013