The news: A J.D. Power customer satisfaction benchmark ranked Citi No. 1 for US mortgage origination, above Bank of America (BofA). The study suggests that lenders are changing their sales model from a focus on volume over service to one emphasizing consultation and advice to enhance customer trust and deepen relationships.

Timing particularly matters, according to the study: Lenders that engage near the top of the funnel tend to register higher satisfaction.

Trendspotting: This new model is in parallel to the evolving “phygital” model. The latter integrates the customer experience across channels, between human bankers and digital services, and is part of banks’ attempt to differentiate themselves among seemingly homogenous products and services. When banks compete on mortgage pricing, they’re constrained by funding and infrastructure costs, which creates sameness.

Zoom out: Mortgages aren’t cheap: The Federal Reserve Bank of St. Louis pegged the 30-year fixed-rate mortgage at 6.24% last Friday. That’s below a peak near 8% last year but up from a mid-pandemic low under 3%.

And mortgage lending has made recent headlines—not in a good way:

• Applications for home purchase loans had their strongest start to November since 2022, according to Mortgage Bankers Association data. An Association economist noted that "potential homebuyers continue to shop around, particularly in markets where inventory has increased and sales price growth has slowed.”
• The Trump Administration made waves when it floated the idea of a 50-year mortgage, and Zillow was sued for allegedly giving its agents kickbacks. FICO whipped up a storm when it announced a new model for pricing and licensing its score to vendors that provide credit reporting to mortgage lenders.

Our take: Consumers should feel supported in the mortgage market. How borrowers feel about the origination experience, from awareness through closing, should strongly influence their choice of provider amid frequent negative headlines and interest rate uncertainty.

Banks’ messaging should emphasize their advisory role and treat the origination process as a relationship-building opportunity.