Online Servicers Score Higher.

WESTLAKE VILLAGE, CA -- A recent study shows that servicers are engaged in a hit-and-miss relationship with borrowers whose lender satisfaction levels ultimately affect the bottom line.

According to the 2007 Primary Mortgage Servicer Study released by J.D. Power and Associates here, mortgage customers who made at least one late payment in the past 12 months say lenders "are slightly more flexible" in scheduling late payments, but tend to be less understanding and accommodating of their specific circumstances compared to 2006.

The biggest finding, Tim Ryan, senior research director of the finance and insurance practice at J.D. Power and Associates told NMN, is that electronic availability makes borrower experience more satisfactory.

"Lenders can support the majority of these customers by being even more considerate," advises Mr. Ryan. "These circumstances often lead to the development of valuable, regular-paying customers."

The study finds highly satisfying customer experience translates into financial benefits for lenders "including increased referrals and higher customer retention rates." For example, doubling the retention rate compared to the 2006 industry average of about 14% can result in an increase of nearly 3% in mortgage servicing valuations, or approximately $38 million for lenders with a $100 billion portfolio.

Furthermore, Mr. Ryan said, "Moving customers to high commitment levels can triple the number of recommendations, almost double the number of additional products that the customer utilizes and reduce marketing costs for generating new business."

Venues to achieve higher retention rates, he said, "first and foremost" include convenient online billing and payment processes and reduced errors. Mr. Ryan told MSN it also is important how one looks at the thousand-point scale index model.