Lesser known lenders may have a better shot at customer loyalty than many larger lenders, but only if customers rate them a "10".

Customer satisfaction about mortgage lenders has improved, but building loyalty remains a tough game in the mortgage lending industry, according to J.D. Power and Associates' "2004 Home Mortgage Study."

Westlake Village, CA-based J.D. Power recently reported that more than three-quarters of consumers who rate their satisfaction with their mortgage lender a "10" on a 10-point scale will return to that lender when it's time for more borrowing.

The number drops dramatically for any rating less than 10.

Fewer than one-in-two consumers who rate their lender a "9" will recommend their lender to others. That drops to fewer than one-in-four when consumers rate their lender an "8," said Jeremy Bowler, director of the finance and insurance practice at J.D. Power and Associates.

"Consumers who have even just one bad experience with a lender are probably not going to go back to that lender. They’re also likely to tell their friends and family members about that bad experience, meaning word can spread quickly," Bowler said.

Based on responses from more than 11,900 home mortgage customers, the survey ranked USAA tops in customer satisfaction, followed by Branch Banking & Trust, SunTrust, Countrywide -- which made a dramatic year-over-year improvement -- and Wells Fargo, to round out the top five individual lenders in the overall satisfaction ranking.

However, just behind Sun Trust, consumers rated "Other (Specified)" lenders high on the list. J.D. Power defined "Other (Specified)" as "an aggregate of smaller home mortgage companies for which significant sample was not collected."

"There are literally thousands of lenders out there for someone seeking a home loan, which means there are plenty of options for consumers," Bowler said.

CitiFinancial, GreenPoint, Conseco, Household Finance and Fairbanks were at the bottom of the rankings list.

Bowler said strategic relationships with other lenders helps boost loyalty. USAA, for example, has maintained a 13-year relationship with PHH/Cendant Corporation to handle part of its day-to-day loan origination and servicing needs of its mortgage customers. More recently, USAA also teamed with GMAC Mortgage Corporation for the same purposes.

Other studies are in line with a J.D. Power find -- customers who remain with the lender that originated their mortgage are far more satisfied than those whose mortgages have been resold to another lender.

Among the 26 percent of all customers who experience this transition to a new lender, only one-third indicate that they would definitely consider using their new service provider for their next mortgage, the J.D. Power survey said.

Consumers have two basic choices when they are ready to shop for a loan. Direct lenders like those featured in J.D. Power's survey, and mortgage brokers.

Direct lenders have money to lend. They make the final decision on applications. Brokers are intermediaries who, like you, have many lenders from which to choose.

Lenders have a limited number of in-house loans available. Brokers can shop many lenders for each lender's store of loans. Consumers who have special financing needs but can't find a lender to suit them may get the loan they need from an experienced broker skilled in ferreting out special loans.

Mortgage brokers, however, are paid -- in part -- from the amount you borrow, some more than others. What some brokers charge is currently a hotly debated issue. Consumers should always learn, to the penny, the exact costs associated with their loan, not just the amount they need to finance.

Along with shopping the source and broker fees, consumers must shop other loan costs, including the interest rate, points (each point is one percent of the amount you borrow), prepayment penalties, the loan term, application fees, credit report fee, appraisal and a host of other fees.

A good starting point are several referrals to lenders or brokers from family, friends and others you trust who recently closed a loan with satisfactory results.