Magazine article Mortgage Banking

J.D. Power Ranks Wachovia Highest in Customer Satisfaction

Magazine article Mortgage Banking

J.D. Power Ranks Wachovia Highest in Customer Satisfaction

Article excerpt

Charlotte, North Carolina-based Wachovia Mortgage Corporation ranked highest among home-equity loan servicers in satisfying customers in 2008, even as overall satisfaction across the industry declined last year, according to a study by Westlake Village, California-based J.D. Power and Associates.

The J.D. Power 2008 Home Equity Line of Credit/Loan Servicer Study [sm] measured customer satisfaction with home-equity line/loan servicers and was based on responses from more than 5,000 customers who originated a home-equity line/loan.

Wachovia ranked highest in customer satisfaction with home-equity line/loan servicers with a score of 746 on a 1,000-point scale, and performed particularly well in the billing and payment factor. Bank of America, Charlotte, North Carolina, followed Wachovia with a score of 743, and it performed particularly well in the area of funds. SunTrust Banks, Atlanta, ranked third overall with a score of 741.

The survey examined four factors to determine overall satisfaction; product features and functionality; billing and payment; funds access; and contact, according to David Lo, director of financial services at J.D. Power and Associates.

"Highly satisfied customers can yield tremendous financial benefits for lenders. For instance, customers of Wachovia are particularly loyal, with only 5 percent saying they would 'definitely' or 'probably' switch lenders in the next 12 months compared with 11 percent for the industry average," said Lo. "Additionally, a six percentage point drop in attrition rates can translate into $134 million in 'saved' balances for every 100,000 borrowers, which further emphasizes the importance of satisfying customers."

The study found that overall satisfaction across the industry has declined from a score of 721 in 2007 to 716 in 2008. The challenging economic market plays a key role in the decline, with actions taken by lenders to reduce risk--such as tightening credit availability and terms, extending fewer credit-limit increases and offering less flexibility for locking rates--contributing to the decrease in satisfaction levels.

In addition, said Lo, poor performance in fundamental areas of home-equity servicing--such as billing and payment processes, and customer contact--have also driven the decline. …

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