Consumers who pay their mortgage online or through automatic deductions rate their home mortgage servicing company significantly higher than customers paying by mail or phone.

That was a key finding in Westlake Village, CA-based J.D. Power and Associates' Home Mortgage Service Satisfaction Ratings, the company's first-ever study of customer satisfaction with the nation's largest mortgage services.

A mortgage service is the company that handles payments and customer service-related issues. The servicer can be the original lender, an affiliate, division or mortgage service company the lender hires to perform those duties.

The Power survey based its findings on mortgage servicer performance in four primary areas: billing, payment, annual account review/administration, and customer-initiated interaction.

The favorable ratings from online customers jibes with a year-old study that says while electronic payments cut "float time" consumers once enjoyed when writing checks, the advantages of paying online go beyond convenience.

Electronic mortgage payments save the cost of postage, but also perhaps the cost of late fees and ultimately credit damage. That's because consumers can see account activity 24 hours and can set up electronic payment accounts to alert then more quickly when trouble arises -- because of an impending payment due or because of suspicious activity.

In a study last year, Javelin Strategy and Research, a Pleasanton, CA-based consultant for financial services, payments, and commerce sector companies, said online account holders typically see their accounts four times as often as paper-based customers who typically view their accounts only once a month, when the billing statement arrives in snail mail.

Electronic payments also remove the paper trail of documents often associated with identity-theft -- receipts with account numbers, statements with person information, etc. The vast majority of consumers who've used and rated electronic payment services on the Epinions.com website, also give high ratings to the services.

J.D. Power found that while only 20 percent of customers surveyed pay their mortgage online, those who pay online or through automatic deductions rate their loan services significantly higher overall than customers paying by mail or phone. Furthermore, customers who currently receive an online bill notification are among the most satisfied overall. However, only 6 percent indicate they actually take advantage of this option.

"In our increasingly electronic world, consumers are always looking for ways to save time in paying their monthly bills," said Jeremy Bowler, senior director of the finance and insurance practice at J.D. Power.

"However, more customers say they would like to pay or receive their mortgage bill online than actually do so, despite existing options available to most borrowers. Given the high impact that the perception of payment options has on overall brand impression, increasing customer awareness of payment options is an area of opportunity for servicers to distinguish themselves in the marketplace."

The study also found customers gave low ratings to loan service companies if their representative didn't speak clearly.

"By far the most common cause of this complaint is poor articulation of words," said Bowler. "Customers who had difficulty hearing what the service representative was saying rated their experience very poorly -- more than 300 index points lower than those customers who indicate they had no difficulties comprehending the representative they spoke with," said Bowler.

The 2005 Primary Mortgage Servicer Study was based on responses from 9,214 home mortgage customers.

Sun Trust Mortgage, followed closely by World Savings, Bank of America and Countrywide were at the top of the favorable ratings heap for mortgage service providers. Greentree, Ocwen Financial, HomeEq Servicing, and Household Finance were buried at the bottom.

Published: August 11, 2005

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.