Home Equity Loans are Taking Longer to Close

[Jun 6, 2010.]

 

Turnaround Times Are Longer

Compared to a year ago, turnaround times to process home equity loans and other mortgage products are longer. The times from application to approval and from approval to closing are longer because of tighter lending guidelines. It has increased from 30 days to about 47 days on average.

J.D. Power and Associates Says Customer Satisfaction Is Down

The increased processing time is causing customer satisfaction to drop even while the number of loan applications has gone up. According to J.D. Power and Associates, overall customer satisfaction has dropped to 739 on a 1,000 point scale, losing 18 points from a year ago.

David Lo, director of financial services at J.D. Power and Associates said, "While the more cautious approach to underwriting mortgages is justified, the longer turn times and more numerous requests for information tend to have a negative impact on satisfaction...some of the negative effects of a tightened lending environment can be mitigated by simply improving communication between lenders and customers."

It's Up to the Mortgage Loan Officer to Communicate Better

Mortgage loan officers are responsible for keeping up with the ever-changing guidelines of the lending industry. The problem lately is that the guideline changes and complications happen more frequently. It is harder for loan officers to keep up in today's market.

The J.D. Power and Associates study identified nine key practices that mortgage loan officers should employ to improve their clients' experiences. Two of the most important areas for improvement are: 1) The loan officer needs to correctly communicate a time frame and close the loan on schedule. 2) The loan officer must request all the necessary information up front, at once.

Best Customer Service for New Home Equity Loans

Compared to new first mortgages, home equity loans are still quick loans. Turnaround times have always been a little better from home equity lenders. If you think you may need a new home equity loan to pay for college, do home improvements, or consolidate high interest debt contact one of the more reputable mortgage loan officers now.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.