For the fifth year in a row, Quicken Loans has been rated No. 1 by consumers in terms of customer satisfaction, according to a J.D. Power survey.
Bank of America jumped to the No. 2 position after being No. 11 among the 13 companies rated in the 2013 survey.
The top companies scored well on the survey when it comes to customer communications. But the overall results were tempered by indications that consumers were not happy with how most lenders kept them informed during the process.
What sets Quicken apart is that "they are incredibly effective at creating relationships, even though it is over the phone," said Craig Martin, who is director of the mortgage practice for J.D. Power in Westlake Village, Calif.
The company makes an effort on keeping its customers informed and engaged during the loan process, Martin said. That includes less formal means such as blog posts on the company's website.
"Culturally they are so focused on customer experience and that really shows up in many of our best practices," he said.
For this year's survey, J.D. Power only received sufficient responses from consumers to score 12 originators. Two other big mortgage originators, Navy Federal Credit Union and USAA were not scored because they serve a limited market, namely military and veteran families.
In addition to its place at the top of the originator rankings, Quicken Loans was ranked No. 1 among mortgage servicers in terms of customer service in a separate J.D. Power survey released this summer.
The gain by B of A was "not a huge surprise" because of the shift to a purchase market for most of 2014, according to Martin.
In 2013 B of A performed "relatively well" with home purchase customers in that year's survey, he said. Much of the lower scores it received was from consumers unhappy with how the bank handled their refinancing.
On the other hand, PNC Bank slipped to No. 10 of the 12 lenders in this year's results after being ranked fourth one year ago. BB&T had a less precipitous drop, going to fifth from second last year.
To be sure, customer satisfaction scores are not comparable to past surveys because J.D. Power changed its methodology in the areas it measures.
But most of the big bank players did see an improvement in their ranking, Martin noted.
For example, JPMorgan Chase jumped to third in 2014 from fifth in 2013 and Citibank/CitiMortgage rose to sixth from seventh. However the nation's largest lender by volume, Wells Fargo Home Mortgage, fell two spots to No. 8.
Joining PNC at the bottom of this year's table are Nationstar Mortgage, ranked 11th (not included last year) and Flagstar Bank at 12th; one year ago, it tied with PHH Mortgage for the bottom spot.
It is not just in the mortgage origination survey where J.D. Power sees an improvement for big banks in terms of customer perception. The rise matches trends the firm has seen in its mortgage servicing and retail bank surveys as well for those big banks, Martin said.
Quicken Loans' persistence at the top of the list is all the more surprising because of its use of the call center model, which is generally not viewed as the best way to contact customers. Although lenders generally encourage face-to-face contact, Quicken does not have any retail offices, instead operating only over the phone.
Yet Quicken had the highest score in each of the six categories measured by J.D. Power.
"Our tenure at the top of this study of client satisfaction is a simple reflection of 'who we are' as a business," said Dan Gilbert, who is the founder and chairman of Detroit-based Quicken Loans, in a press release. "Our nearly 12,000 team members go to tremendous lengths every single day to deliver the best client experience in the industry. This is led by a culture where innovation, passion and execution thrive."
The shift to a purchase market could have an impact on Quicken's business because of the real estate agent's influence on choice of mortgage provider. But the core fundamentals of customer service that has kept Quicken at the top for five years apply in both purchase and refi markets and that is likely to benefit the company, Martin said.
The survey also covered how the borrower perceived the mortgage experience. Almost 60% of the survey respondents were first-time homebuyers.
Almost half the respondents said because of uncertainty about the loan origination process they went to a lender's local office in order to receive personal advice.
Still, 35% of all respondents, including 43% of the first-time homebuyers, said they did not completely understand the process.
"There is an opportunity to do better. Some of the best practices which make customers really happy is making sure they really understand what is going on," Martin said.
Customers want communications from their lender. That is especially true for first time buyers and their experience at the closing table. Among that segment, 44% complained that the closing agent did not fully explain all of the documents in the package; just slightly more than one quarter of experienced buyers had the same feeling, the survey found.