Insights

Artificial intelligence (AI) is here to stay. Three-fourths of business leaders say they are planning to escalate their AI investments, as they see its potential to redefine customer service and many other business functions. That includes the lending industry, in which AI-powered customer service has already started to establish a foothold and is poised to grow. Are customers ready for the future of AI-driven customer service?

As trust and transparency become paramount, servicers are surprisingly thriving amidst challenges, showcasing resilience in customer relationships. In this month’s update, JD Power, Bruce Gehrke, Senior Director of Lending Intelligence and Miles Tullo, Managing Director, discuss the latest insights from the Mortgage Origination Satisfaction Study and Mortgage Servicer Satisfaction Study. Here’s a breakdown of the key highlights:Why Mortgage Originators Face a Satisfaction SlumpBorrower satisfaction with mortgage originators has dropped significantly in 2024, reversing last year’s positive trend. Only 42% of lenders are achieving higher satisfaction scores this year, down from 70% in 2023.Key factors influencing borrower loyalty and advocacy include:Trust: Borrowers need to feel confident they got a good deal.Ease of the process: Simple, fast, and transparent processes resonate with borrowers.Competitive interest rates: While market factors dictate rates, customers expect lenders to remain competitive.“At the end of the day, those interest rates matter, and a customer needs to believe and trust that their lender gave them a good deal,” says Bruce Gehrke.Interestingly, digital tools—despite heavy investment—are not delivering the highest customer satisfaction. Traditional, human-centered service models continue to outperform digital-first approaches.Mortgage Servicers Thrive Despite Rising ChallengesMortgage servicers are seeing a notable increase in satisfaction, even among financially vulnerable customers. Trust plays a vital role, especially when servicers aim to retain customers for refinancing opportunities.The top factors driving servicing satisfaction include:Minimal interactions: Customers prefer smooth experiences with few issues requiring service intervention.Transparency: Clear communication about fees and escrow accounts is crucial in building trust.Escrow management: Rising insurance premiums and property taxes put pressure on servicers to manage escrow accounts effectively.How Declining Rates Will Reshape the MarketAs elevated interest rates reduce transaction volumes, the mortgage market is undergoing rapid changes. However, as rates begin to decline:The refinance market may experience a resurgence, with direct-to-consumer models gaining the most traction."Trade-up" borrowers—those who have been reluctant to sell due to low-interest mortgages—may re-enter the market. Where can you find more insights like this? Stay up to date on the latest mortgage customer satisfaction insights with JD Power. Discover key trends and performance metrics in the Mortgage Origination Satisfaction Study and the Mortgage Servicer Satisfaction Study, covering the experiences of thousands of borrowers and homeowners. RecEIVE our Upcoming Press ReleasesMore About These Experts Bruce Gehrke is the Director of Lending Intelligence at JD Power, overseeing including the Mortgage Origination Satisfaction Study and Consumer Lending Satisfaction research. He develops client improvement strategies based on data analytics and has built consulting relationships with leading asset managers and mortgage lenders.Miles Tullo is the managing director of the JD Power Financial Services team. He oversees the company’s consumer payments program, focusing on point-of-sale choice and non-credit card payment methods. Drawing from over 20 years of experience in both payments and mortgage lending, Miles brings valuable expertise to clients.