Loan Sales and Servicing Transfers Can Damage Customer Satisfaction.(Brief Article)

Selling a loan to another mortgage lender has a negative effect on customer loyalty, the inaugural J.D. Power and Associates Home Mortgage Study found.

The survey found that 40% of mortgage customers are being serviced by someone other than their originator. These customers are significantly less than happy with their current servicer.

The survey question did not distinguish between whether the loan was originated by a mortgage broker and then sold or if it was originated by a mortgage banker and the servicing rights sold to another entity. Rather the question asked if the customer was happy with the entity to which they currently made their payments, explained J.D. Power's Jeremy Bouler.

Approximately 20% of those who either had their original loan or refinanced loan sold would use their current servicer again. There were 11% of those whose original mortgage was sold who would recommend others to use that servicer, while 13% of refinanced borrowers would do the same.

This contrasts with 37% of borrowers who have their mortgage serviced by the same originator and 41% of those who refinanced whose loans are serviced by the same originator saying they would definitely use that same lender.

Furthermore, 31% and 36% of the respective categories above would recommend their lender to their friends.

The study is based on over 6,800 responses nationwide.