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[BOSTON] JPMorgan Chase & Co tumbled to No. 10 in an annual survey of customer satisfaction for mortgage-servicing companies, behind competitors such as Bank of America Corp, after being ranked second-best by homeowners last year.
The biggest US bank by assets, JPMorgan was surpassed in the ranking by fellow giants Wells Fargo & Co and Bank of America as well as a half-dozen smaller firms, according to JD Power and Associates' 2015 results, released Thursday. The top spot was retained by Quicken Loans Inc, said JD Power, which surveys consumer attitudes on products and services.
JPMorgan boosted its investment in mortgage servicing through the purchase of a US$45 billion loan portfolio from Ocwen Financial Corp. Following that deal, federal regulators in June restricted future acquisitions of servicing rights by JPMorgan, Wells Fargo and four other lenders, saying they haven't met the terms of their 2013 settlements over mortgage abuses.
JPMorgan earned a score of 730 on the 1,000-point JD Power scale this year, down from 782 in 2014. The total score for the industry was 718, down from 754 last year.
"We focus on delivering for our customers every day," Amy Bonitatibus, a spokeswoman for New York-based JPMorgan, said in an e-mail. "We will assess this year's changes to the JD Power survey metrics and continue to look for ways to improve the customer experience."
JPMorgan has the highest rating in the Treasury Department's assessment of mortgage servicers taking part in federal foreclosure-avoidance programs, and there's been a 20 per cent decline in mortgage complaints against the bank since the beginning of last year, Bonitatibus said.
JPMorgan gave up its No 2 spot in the JD Power survey to Citizens Financial Group Inc, based in Providence, Rhode Island, while McLean, Virginia-based Capital One Financial Corp ranked No 3. Among bigger banks, Wells Fargo was No 6, down two spots from last year, and Bank of America ranked No 9, up from No 13.
The survey, which began a decade ago, measures satisfaction in categories such as billing and payment process, escrow- account administration and website navigation. It was based on responses from 5,922 customers surveyed in March and April, according to JD Power, a unit of McGraw Hill Financial Inc.
A crackdown on default servicing in recent years by regulators such as the Consumer Financial Protection Bureau has sapped money and attention from mainstream borrowers, said Craig Martin, director of the mortgage practice at JD Power. About 15 per cent of respondents were "at-risk customers," meaning they were behind on payments or concerned they'd have trouble staying current in the next year, according to the report.
"Servicers are spending a lot of time and money on a small percentage of their customers, neglecting the wider audience of borrowers who are paying on time," Mr Martin said in a telephone interview. JPMorgan has promoted its second-place ranking by JD Power, mentioning it in an earnings announcement just two weeks ago.
"It's a tough time to be a big-bank mortgage servicer because of the degree of regulatory scrutiny," said Douglas Harter, an analyst at Credit Suisse Group AG. "I'm sure if JPMorgan had a crystal ball showing them they were going to fall to the No 10 spot, they wouldn't have mentioned JD Power in their earnings report."