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The 411 on CSAT in the Residential Real Estate Mortgage Industry

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By Amy Tankersley

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The current mortgage climate underscores how vital communication and service are to mortgage lenders and their customer satisfaction rates (CSAT). A well-known marketing metric, CSAT is used to determine customers’ overall opinion of the closing process. Data is generally gathered by short, simple surveys that ask customers to rate their interactions and closing experience. Ultimately, gaining awareness of your customers’ satisfaction levels can help lenders improve their service and adapt to changing customer needs and expectations.

Every mortgage transaction is distinctive, and it is important for lenders and their borrowers to always be clear on exactly where they are in the closing process. Questions and tricky title situations can cause confusion, frustration, and unnecessary delays or even cancellations. The right service level agreements (SLAs) can result in happier lender customers for title companies, and higher CSAT rates for lenders.

According to industry experts, CSAT scores can be improved in three key ways:

  • Responding to customer inquiries as soon as possible
  • Tapping into staff expertise to resolve problems quickly
  • Gathering specific feedback on the multiple touchpoints customers encounter along their homebuying journey

At States Title, we have developed best-in-class SLAs featuring complete and fast responses to customer inquiries, transparent, up-to-the minute performance metrics, and post-closing quality management – giving our lender customers the tools they need to delight their customers, no matter what market or economic challenges they may be facing.

Earlier this year, a top five national mortgage lender analyzed the results of a nine-month pilot program with States Title’s instant underwriting solutions, finding that the lender’s mortgage division experienced a 23-percent reduction in time to close, enabling successful completion of five percent more loan applications and resulting in additional revenue realized per month.

Most importantly, the lender achieved a 93 percent CSAT score across all files processed with States Title, far surpassing the industry average of 77 percent, as well as most of the lender’s closest competitors.

CSAT: An evolving concept

In recent years, mortgage lender CSAT scores have improved, but they tend to drop as loan origination volume rises, according to the J.D. Power 2019 U.S. Primary Mortgage Origination Satisfaction Study. While satisfaction scores climbed throughout most of 2019, they fell in the second quarter of last year due to a surge in refinance volume.

According to the study, consumer satisfaction scores tend to be higher when borrowers are provided real-time status updates about their loan. However, the involvement of lenders’ partners can drop satisfaction and trust by about half, underscoring the ongoing challenges lenders have in controlling the loan experience.

“It is critical that originators get the balance right between tech and staffing to be able to deal with the swings in loan volume that can dramatically change from month to month,” said John Cabell, Director of Wealth and Lending Intelligence at J.D. Power.

The dynamic between lenders and title companies has also changed in the last five years thanks to the implementation of the TILA-RESPA Integrated Disclosure (TRID) rule. Part of the Consumer Financial Protection Bureau’s “Know Before You Owe” consumer financial education initiative, TRID took effect on October 3, 2015 and consolidated four consumer disclosures required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) into two forms – a Closing Disclosure form and a Loan Estimate form – each of which must be provided to consumers by certain deadlines. It also placed compliance oversight responsibilities square on lenders’ shoulders.

On a recent October Research webinar, “Evolving Lender Relationships,” Landy Liu, General Manager of Better.com, explained how recent challenges have necessitated greater empathy, understanding, proactivity, and communication between lenders and their title partners.

“It’s periods like this that show which title partners are proactive, in touch with the news, and willing to go the extra mile to be your partner and consultant,” Liu said. “Because this event has really brought us, in some ways, to our knees, we are understanding each other in our respective constraints a little bit more. There are a lot of expectations that title providers have for us, but when refinance volumes are skyrocketing and we aren’t exactly sure what our business might look like in the next few months, it is helpful for them to go the extra mile in understanding the things that may affect each of our businesses.”

Also speaking on the webinar, Kate Steineman, Senior Vice President and Business Liaison Manager for Wells Fargo Home Mortgage, noted that TRID pushed “the need to collaborate heavily and rely on input from our settlement agent partners for our fees and other required content.”

“Everyone is looking to create the best customer experience possible, and continuing to improve our communication is one of the most effective ways to accomplish that,” Steineman said. “It will always be a two-way street between the lender and our agent partners to make sure we are all on the same page of creating that excellent customer experience. With all of the technology we have… the most important thing is that the phone hasn’t gone anywhere. It’s really important to ensure we are all continuing to communicate and effectively reach out if there are questions or changes that happen. The sooner lenders can provide documents or the closing package to the settlement agent, the better the experience will be. If we’re waiting for moments before the closing to send out documents, any questions, issues, or potential roadblocks that an agent might see just wouldn’t have the time to be properly thought through as they might have been had they been delivered earlier.”

Complete and competent customer responses are key

According to Kat Johnson, Assistant Vice President and Mortgage Closing Supervisor for City National Bank in Los Angeles, responding to customer inquiries in both a timely and complete manner are the main drivers for lender CSAT.

“Responses are huge, and the knowledge base of the people responding, too, because the structures of our loans are not typical,” Johnson said. “We do crazy entertainment loans for high-profile clients. They expect things to be done faster because of who they are. We’re concerned about the speed of response, but also that somebody is able to answer our questions appropriately and not with a, ‘I think I can look’ type of response. Competent answers make everybody feel better, not just high-profile clients. If the title company we are working with knows the structure and process of our loans, that makes working with them so much easier.”

Having a personal relationship with a title company is also invaluable, Johnson said.

“It makes my escalations to them easier,” she said. “I don’t feel like I am being ridiculous or inconvenient, because we have that relationship and they understand our concerns.”

In the next blog in this series, we examine the centerpiece of States Title’s SLA offering: Our best-in-class concierge service, which provides every customer a dedicated “quarterback” of the transaction.