If you’re looking for a local mortgage lender with a high satisfaction rating for customer service, one that strives to make the process simple — especially for first-time homebuyers — good luck. The lender rated highest in customer satisfaction for mortgage origination and servicing doesn’t have an office in your hometown. But you will find the company online and might recognize its name: Quicken Loans.
How finding a home mortgage lender is changing
Quicken Loans has topped J.D. Power’s list of mortgage lenders for customer satisfaction for five consecutive years. Last month, the consumer research firm rated the company best in mortgage loan servicing for the second straight year, too.
While first-time homebuyers are comfortable researching the mortgage process online, nearly half (48%) still head to a local lender’s office to get advice, according to J.D. Power.
Quicken, exclusively an online lender, is betting that trend will change rapidly. In the November 2014 mortgage origination study that ranked Quicken best for customer service, 58% of the respondents were first-time homebuyers. And Quicken Loans is now the nation’s second-largest retail home mortgage lender.
Banks are abandoning FHA loans
Many first-time homeowners, including low-income and minority buyers, seek loans backed by the Federal Housing Administration, which have favorable interest rates and require lower down payments than most traditional home loans.
“We’re the No. 1 FHA lender in the country,” says Bob Walters, chief economist for Quicken Loans. “You’re seeing lenders putting restrictions over the top of FHA guidelines which make it harder for [first-time homebuyers] to buy homes.”
He says Quicken Loans has filled the space that traditional lenders have largely abandoned.
“If you take a look at who the top 10 FHA lenders were a few years ago, you’d see Wells Fargo, Bank of America, Citi, Chase, U.S. Bank. Those names are now gone for the most part out of the top 10, or even the top 25. In fact, there are only three banks left in the top 25,” Walters says. “They’ve all evacuated out of FHA lending, or they’ve diminished it rapidly.
“That has left a vacuum — and first-time homebuyers, low-to-moderate income buyers and minority buyers are the ones that are suffering,” he adds.
Only one lender beats Quicken in mortgage loan service
Craig Martin, director of the mortgage practice at J.D. Power, says the company earned the mortgage servicing customer service award by having above-average website interaction satisfaction, encouraging “innovation” and being “customer driven.”
“Quicken is an example of stepping out beyond the traditional [mortgage] statement and using technology effectively and taking a different approach,” Martin says. He cites as examples Quicken’s simplification of escrow account summaries, as well as its user-friendly website.
USAA received an even higher satisfaction grade than Quicken in the mortgage servicing survey, but was not awarded the top ranking because of its membership restriction. USAA offers its services exclusively to U.S. military service members, veterans and their families.
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Image of Quicken Loans headquarters via iStock.