CFPB/FHFA Poll Examines Pre-Pandemic Borrow Experience

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Americans who applied for mortgages in 2017-2019 reported slightly increasing apprehension about not being approved than in previous years, more used a mortgage broker, and a large portion of the respondents to a survey by two federal agencies said paperless online mortgage processes are vital when choosing a lender. Agency officials point out that the datasets reflect consumers’ views just prior to the onset of the pandemic, which could mean valuable insight for lenders and brokers in the months ahead.

The results come from a borrower-experience study by Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB), which includes updated loan-level data mined by the National Survey of Mortgage Originations (NSMO) from people obtaining residential mortgages.

“The NSMO data released today sets a baseline about how borrowers viewed the mortgage process just prior to the COVID crisis,” said FHFA Deputy Director Lynn Fisher. “Releasing this data to the public helps promote an understanding of the specific challenges and successes that borrowers experienced during the mortgage process.”

Hearing directly from borrowers involved in the origination process can bring clarity and understanding to market trends, added Mark McArdle, CFPB Assistant Director for Mortgage Markets.

“The data collected in this survey will provide us with a fuller picture of borrowers’ experiences and will improve the lending process for future borrowers.”

Below are several of the key takeaways from the study:

  • The percent of survey respondents who reported not being concerned about qualifying for a mortgage during the application process increased somewhat from 2018 to 2019 (from 48 to 51% for home purchase mortgages and 57 to 66% for refinances).
  • The percent of survey respondents who reported a paperless online mortgage process being important in choosing the mortgage lender/broker remained relatively high and unchanged from 2018 to 2019 (40% for home purchase mortgages and 44% for refinances).
  • The percent of survey respondents who reported applying for a mortgage through a mortgage broker increased from 2018 to 2019 (from 42 to 46% for home purchase mortgages and 30 to 38 % for refinances. The percent of survey respondents who applied directly through a bank or credit union decreased from 2018 to 2019 (from 54 to 49 for home purchase mortgages and 67 to 61 for refinances).

More recent client satisfaction data:

A J.D. Power-published survey that rates customers’ experience with their mortgage servicers showed an increase of overall satisfaction by a significant six points during the past year, as the industry combined relief efforts and pivoted to digital solutions in order to help clients weather the effects of a global health crisis. That said, the data analytics and consumer intelligence company’s 2021 U.S. Primary Mortgage Servicer Satisfaction Study indicated that, as stated in a press release, “the pandemic-driven goodwill belies a larger collection of client-satisfaction challenges, especially for bank-affiliated lenders. As loan forbearance programs come to an end and more normalized customer interactions resume, traditional banks are starting to lose their edge over non-bank lenders.”