NEW YORK (
) -- Mortgage borrowers ranked the nation's three largest banks,
Bank of America
as the three lowest institutions for overall customer satisfaction, according to a new report.
PNC Financial Services
rounded out the top three mortgage originators in terms of satisfaction, the study says.
According to the annual J.D. Powers and Associates 2010 U.S. Primary Mortgage Origination Satisfaction Study, the three banks ranked below the industry average and rounded-out as the last three orginators listed in the report's customer satisfaction ranking.
The report, released on Thursday, is based on responses from 3,401 customers who originated new mortgages within the past 12 months. The study itself was conducted between July and August of this year. It measures customer satisfaction in four key areas in obtaining a mortgage: application/approval process, loan officer/mortgage broker, closing, and contact, J.D. Powers and Associates says.
Among the findings in the study, the past 12 months marked the third consecutive year in which the length of time from application to approval has increased to 27.5 days from 20 days in the prior year period. Consequently, the time frame for the entire process has risen to 52.1 days from 46.9 days, while the average customer satisfaction level has declined to 734 based on 1,000 point scale, J.D. Power and Associates says.
J.D. Powers and Associates' director of financial services David Lo says the longer approval time is a direct effect of the revised guidelines under the Real Estate Settlement Procedures Act (RESPA), which were designed to expand disclosures, particularly on fees, for consumer mortgages.
"While the revised
RESPA guidelines appear to have streamlined and shortened the time from approval to closing, the unintended consequence is that the application to approval time frame has lengthened and become more complicated," Lo says in a statement. "Ultimately, the longer time frame has a negative impact on overall satisfaction, although there are specific best practices that may mitigate the negative perceptions."
On the other hand,
Nearly 20% of customers started their mortgage process online, up from 14% a year earlier, the study says.
In addition, fewer customers this year said they met in person with their loan officer or broker during the origination process - 50% vs. 57% a year ago, the study says.
Other mortgage originators that came in above the industry average of 734 included
Fifth Third Bancorp
, Wells Fargo, Ally Financial's GMAC Mortgage and Provident Funding Associates.
-- Written by Laurie Kulikowski in New York.
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