Communication Matters

Many people in the mortgage industry are very upset with the CFPB and all the trouble that was caused in order to ensure TRID compliance. What’s done is done. Hopefully the industry can learn from this exercise. For example, STRATMOR Group found that reaching out to borrowers prior to loan closing dramatically increases borrower satisfaction while, at the same time, regulators will likely view this as a step towards better TRID compliance, as well.

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“One aspect of TRID compliance is making sure that the customer is notified before closing about any changes in costs and that they have time to review,” said Tim Ryan, Senior Director at STRATMOR Group. “The data is quite clear that borrowers want a call from someone they trust inside the lender’s shop before they are asked to sit down at the table and sign the closing documents. It is important to note that they are less satisfied when they don’t receive it. In addition, STRATMOR data indicates that when borrowers are surprised by the numbers, customer satisfaction plunges.”

STRATMOR’s analysis of over 40,000 MortgageSAT borrower surveys indicates that when lenders discuss loan details prior to the closing of the loan, average borrower Satisfaction scores 92 on a 100 point scale, a relatively high average score. Of those surveyed, 12.9% report they were not contacted, and the subsequent satisfaction level dropped to 61. When satisfaction falls to this level, it is likely to result in adverse borrower comments to friends and relatives and/or adverse comments and postings to regulators or social media. This exposes the lender to reputation risk and negates the possibility of gaining referral or repeat business from the borrower.

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“The CFPB is serious about the industry improving borrower’s satisfaction associated with taking out a mortgage loan,” Ryan said. “Of course, it’s too early to tell whether the new forms and processes will indeed accomplish that. What we do know is that STRATMOR will be tracking it. We also know that a pre-close call is an excellent opportunity for lenders to offer last-minute clarifications that boost customer satisfaction and comply with both the letter and the spirit of the new TRID rule.”

So, if we were to learn on lesson from TRID, it would be that communication matters.

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