Banks Are Missing an Opportunity to Increase Their Mortgage Business by 79% with Their Current Customers

CHARLOTTE, N.C.--(BUSINESS WIRE)--Thirty-nine percent of survey respondents have their mortgage with their primary bank, the bank with which they do the majority of their business. And, 70% of respondents would prefer to have their mortgages with one of their major banks. This means that primary banks are missing an opportunity to increase their mortgage business by 79% with their current customers. This major finding comes from a consumer mortgage study conducted by Carlisle & Gallagher Consulting Group (CG, www.carlisleandgallagher.com), a management and technology consulting firm serving the financial services industry.

“Banks must align to customer values to win mortgage market share”

CG surveyed consumers to learn about their views toward home ownership, how recent changes in the mortgage industry impacted their application experience, what factors are most important in the mortgage application process, and if customers would be willing to pay more for a mortgage if it came with certain benefits.

According to the 618 U.S. consumers who participated in CG’s online study in September 2012:

Cost remains king when it comes to new mortgages and refinancing, but the study shows it’s a lot more complicated than just low interest rates.

84% of respondents rated cost as one of the five most important factors in the mortgage process. Cost, trust in the financial institution, and quality customer service are the top three most important factors in the mortgage application process, and are also potentially profitable.
34% of consumers (referred to as the “Pay More” group) are willing to pay more for a mortgage if it comes with superior customer service. Fifty-two percent of these respondents are willing to pay more to complete the mortgage process more easily. And, 39% of Pay More respondents are willing to pay more to use their primary bank.

Regulatory Changes Have Little to No Impact on Consumer Perception

Only 23% of U.S. consumers believe regulatory changes will have a positive impact on their next mortgage
77% of consumers believe that regulatory changes will have a worse or no impact on the mortgage process

Homeowner Confidence is High

46% of respondents expect their home values to grow significantly over time in addition to delivering significant financial return
1 in 5 consumers expect to purchase a home in the next 3 years
Only 4% expect housing values to decline over time
53% of respondents still consider their home to be their most important investment (most significant for family incomes below $100K)

Consumer Frustrations with the Mortgage Process

High interest rates, high payments, and taxes and escrow are the top three most frustrating issues regarding consumers’ current mortgages
56% of consumers blame slow execution as one of the most painful aspects of the mortgage process
Untrustworthy advice rises to the top of the trust segment with 26%
32% said difficult to communicate with
31% said unable to track the status of their mortgage application

“Banks must align to customer values to win mortgage market share,” said Tom Mataconis, CG’s Vice President of Consulting. “CG believes that banks who focus on trust and customer service as differentiators will gain market share in the new normal. Low cost is simply table stakes.”

For more information about this study, register for the CEB TowerGroup Webinar “U.S. Mortgage Lending: Strategies to Gain Share in the New Normal” on November 15, 2012, at 1:00 p.m. EDT / 10:00 a.m. PDT

https://www306.livemeeting.com/lrs/1100005398/Registration.aspx?pageName=715lb25wjgsp3zcp

To request a copy of CG’s research report on Consumer Mortgages available in December, email insight@cgcginc.com.

About Carlisle & Gallagher Consulting Group

Carlisle & Gallagher Consulting Group (CG) is a management and technology consulting firm that delivers large-scale, complex technology solutions for the world’s leading financial services organizations. We help our clients solve their most critical business and technology problems. Headquartered in Charlotte, NC, CG is inspired to help our stakeholders succeed – from clients to employees to the communities in which we live and work. For more information, visit www.carlisleandgallagher.com.