Combining Machine Intelligence and a Bespoke Customer Service Model to Drive CSAT in Mortgage Lending
In early 2020, a husband and wife flew to California to close a cash-out refinance. The home was free and clear of any liens on the property, and the lender promised them a 21-day closing – so the couple anticipated a simple, straightforward transaction.
Unfortunately, the closing process that ensued was far from simple or straightforward. Early on in the transaction, the lender demanded a termite inspection and required roof repairs to be completed before funding. After complying with this requirement, the homeowners then encountered “delay after delay, mistake after mistake, wasting precious time,” which “ultimately sank this deal,” costing them an expensive trip to California.
So reads a consumer narrative filed with the Consumer Financial Protection Bureau’s (CFPB) Consumer Complaint Database, in which the homeowners note: “Every time we were told that all the documentation we needed to provide was accepted and we don’t need anything else, invariably someone remembers they need something else days or weeks later, leading to changing the loan amount and lender credits and delaying closing the loan.”
As reflected by the publicly available data in the CFPB’s database, consumers find the process to close a mortgage loan or refinance an existing loan notoriously onerous, confusing, and time-consuming. Despite efficiencies made possible by newly developed technology, the average closing time is 59 days for a purchase transaction, and 47 days for a refi, according to leading mortgage software company Ellie Mae.
And lenders are just as frustrated as consumers are by the antiquated mortgage closing process.
Kimberly, a chief operations officer at a national mortgage lender, is laser-focused on meeting her organization’s target revenue goals, but she feels that she must continuously reinvent her organization for growth and maintenance. Although she embraces the “tech sizzle” and wants to propel her company forward with process improvements, onboarding new technology solutions often means extensive staff training and costly business disruptions.
Heather, a mortgage loan officer, concentrates on providing borrowers with the best mortgage product based on their needs and qualifications. She desires more efficient processing of data and loan information, reducing customer interactions, and improving loan turnaround times.
Jason, director of operations for a bank’s mortgage department, knows that customer satisfaction (CSAT) scores are important and impact not only the business, but also loan officers’ compensation. He values quick response times and customer service from vendors, but synchronous communication across multiple parties is a constant challenge.
This is a snapshot of some of our customers’ goals and challenges, and a glimpse of common pain points felt for years in an industry in dire need of a modern-day upgrade. Doma is tackling these concerns with a combination of powerful data analytics capabilities and a bespoke customer service and success solution which, as our customers have recently seen, have vastly improved CSAT scores.
In a recent video interview with The Real Deal, Doma Founder and CEO Max Simkoff explained how this multifaceted customer experience approach has changed the nature of underwriting.
“We have basically changed the nature of the work that people are doing so they can be more focused on relationship management and communication with loan officers,” he said. “We went into this with eyes wide open and also excited about being able to combine the best parts of this new business together.”
Customer Satisfaction and Customer Success: Why Your Company Needs Both
What is CSAT?
According to marketing software developer Hubspot, CSAT is a survey methodology that measures customer satisfaction with
a business, purchase, or interaction. The well-known marketing metric has become a standard practice in almost all businesses over the past decade, and can be used to assess the following:
- Customers’ overall opinion of a service
- What customers want and how to meet their needs
- Customers’ satisfaction at key interaction times during the customer lifecycle, such as the moment of purchase, the onboarding process, and interactions with customer service teams
- Service provider’s level of knowledge/expertise, professionalism, response times, effective communication, and timely problem resolution
A CSAT rate is calculated by asking a question and prompting the customer to rate their answer on a corresponding Likert scale. Most surveys use 3-, 5-, or 7-point scales. For example:
Generally, a CSAT score is expressed as a percentage:
As noted by Hubspot, CSAT scores vary by industry, but a good score typically falls between 75 percent and 85 percent — which means that three out of four customers gave you a positive score, instead of a negative or neutral score.
According to global experience data company Qualtrics, maximizing satisfaction of the customer journey can yield significant benefits for your business:
Conversely, as noted by customer experience technology provider Sharpen, low CSAT scores can negatively impact your business, resulting in:
- Fewer repeat purchases from current customers
- Fewer new customers
- Unhappy employees who deal with customer complaints
- Less profitable business
Why is CSAT Important in the Mortgage Industry?
To date, borrower satisfaction may have been considered a “nice-to-have” component of mortgage lenders’ sales strategy as opposed to a “must-have,” but in today’s challenging market conditions, measuring CSAT is more important than ever.
STRATMOR Group, a data-driven mortgage advisory firm, notes that “referrals and repeat business are driven by creating a delightful experience for the borrower from start to finish.”
“In a world where information about borrowers’ experiences with their lenders is readily accessible to other potential borrowers — and is increasingly important in their choice of a lender — it behooves lenders and loan originators alike to be intensely focused on keeping these commandments,” said Mike Seminari, Director of STRATMOR’s MortgageSAT Program. “Doing so could easily mean an extra two or three ‘windfall’ loans each month referred by delighted customers.”
In recent years, mortgage lender CSAT scores have improved, but they tend to drop as loan origination volume rises, according to the 2019 J.D. Power U.S. Primary Mortgage Origination Satisfaction Study. While satisfaction scores climbed throughout most of 2019, they fell in the second quarter of last year due to a surge in refinance volume.
According to the study, consumer satisfaction scores tend to be higher when borrowers are provided real-time status updates about their loan. However, the involvement of lenders’ partners can drop satisfaction and trust by about half, underscoring the ongoing challenges lenders have in controlling the loan experience.
The 2020 J.D. Power U.S. Primary Mortgage Origination Satisfaction Survey highlights how changing consumer expectations of a more modern and efficient mortgage experience are influencing their satisfaction rates with lenders. The study found that three percent of mortgage customers exclusively rely on digital self-service channels in the origination process. However, the study noted that CSAT rates decline sharply for each day they spend waiting for a response to an inquiry.
Technology alone is not a magic bullet in this market,” said John Cabell, Financial Services Practice Lead at J.D. Power. “The key is knowing where to leverage it, and where to layer in more traditional forms of one-on-one support.”
Customer service is obviously essential to customer satisfaction, but Doma is also dedicated to ensuring customer success, which differs in one key way: Customer service reacts to problems and concerns as they arise, while customer success is more proactive, taking a holistic view at the entire customer life cycle.
“Customer success is a relatively new field, and one that grew up alongside the advent of the software-as-a-service (SaaS) model,” said Jasper Bear, Doma’s Director of Customer Success. “Customer success takes that model to a different level, where you are constantly working to prove to the customer that the software is valuable. We imagine a specific life cycle for each transaction for our customers and try to guide them through it in a proactive way.”
Leveraging its powerful data analytics expertise, Doma gathers data on multiple facets of each file and shares them with our customers. “In general, customer success as a function continually looks at its own processes and tweaks them to improve them, so our other goal is to keep getting better at what we do,” Jasper said.
“Customer success is ultimately achieved by fostering future growth,” he added.
“We are very focused on creating conditions that allow for expansion,” Jasper said. “We’re growing along with our customers as they grow. We look forward to meeting the needs and demands of our growing customer base.”
What Do Customers Want?
In early 2020, Doma surveyed 400 mortgage executives and loan officers and processors about what they value in a title and escrow partner. Although nearly half of respondents listed accurate title searches and low rates as their top priorities, several other service-related functions ranked high on their wish lists, including:
- Knowledge and expertise of the partner
- Timely response
- Simple ordering process
- Faster-than-average time to close
More than a third of survey respondents also identified a strong personal relationship with their title partner as a determining factor in their choice of title provider. Reasons to leave a title partner were also rooted in service and quality concerns, with 17 percent of respondents voicing their frustration when their teams were burdened with having too much hands-on involvement in the transaction.
Instead, respondents said they are seeking a thought leader in the title and escrow space that instills confidence in all aspects of the relationship. Customers also said superb service is critical to their partnerships with title companies.
“We have done deep evaluations of what borrowers and lenders want and expect,” said Nate Jones, Doma’s Senior Manager of Customer Success. “Lenders rarely care who their title company is or interact with them – yet, if we do a bad job, that reflects more on the lender than us to the borrower. If we have a good relationship with the lender, they look good to their customer. If a customer leaves a lender, they can no longer send business to us because they are losing customers. This influenced how we chose to approach our customer service and success models.”
Doma’s Multifaceted Approach to Ensuring High Mortgage CSAT
For mortgage lenders, real estate and title insurance providers, and consumers alike, a fast, frictionless real estate closing is the holy grail. For Doma, transforming a slow, cumbersome, century-old process means combining our machine intelligence-capabilities with exemplary customer service to ensure that every transaction is efficient and less stressful. Our Operations team has a holistic approach to offer fast turnaround times, error-free files, a delightful experience for all parties involved – and high CSAT scores for our customers.
We liken this approach to a two-sided coin. On one side is part of our patented instant underwriting solution, which can deliver a title commitment in under a minute for 80 percent of residential refinance transactions, addressing borrowers’ growing demands for an easy closing experience and turnaround times for lenders.
“We have found that when it comes to instant title underwriting, the customer wants the best of both worlds: They want their files to close in a week, but they also want everything done to their specifications,” said Andy Mahdavi, Doma’s Chief Data Science Officer. “We are a data-driven title company the way no other title company has been, but the truth of the matter is machine intelligence is not perfect. Our instant underwriting technology can handle 80 percent of cases, but we need our best title experts – that human in the loop – to handle the toughest 20 percent of cases and help train our data analytics to enhance our future capabilities.”
The flip side of the coin is a bespoke customer service model that ensures each lender receives custom, personalized attention to detail in every transaction. The model begins with a thorough customer onboarding process that memorializes lender preferences for communication and service in service level agreements (SLAs) that serve as the architecture of every closing.
Our nimble concierge team then ushers the closing from end to end, serving as a single point of contact for the lender and consulting with our knowledgeable production team to quickly resolve complex title issues. As the closing progresses, we continually track each stage of the file against the customer’s predefined SLAs and share metrics to ensure we are supporting the customers’ needs and exceeding their service expectations. Finally, once a transaction is consummated, Doma’s Operations Excellence team conducts a thorough audit of every file to identify areas of improvement and further streamline processes.
“Technology and data analytics are tools that we use to ensure our customers are meeting their goals,” said Nate. “These tools ensure that we are aligned with the lender’s objectives and give them an exceptional customer and borrower experience. By taking this approach, we strengthen our relationships with lenders, rather than focus only on building relationships with them. Ultimately, this creates the best borrower experience possible.”
The Technology Component
In 2019, the U.S. Patent and Trademark Office issued to Doma a patent for “Machine Learning Using Multiple Data Types.” Our predictive analytics algorithms cull proprietary data sources on the property and assign a risk score to determine how safe a property is in terms of potential liens and other liabilities that may cloud a property’s title. The solution can deliver a final title commitment, free of defects, in less than a minute for 80 percent of refi transactions.
But that’s just one aspect of the instant title solution Doma has developed. In addition to automating much of the title search process, the instant underwriting model patented by Doma is also designed to accommodate risk-based decisions.
“We are in the business of insurance, and we believe that means handling claims expeditiously and completely,” said Kirk Wells, Doma’s Senior Vice President of Strategic and Enterprise Accounts. “What we have found over the last few years is that a lot of the items that exist on a clear-to-close title commitment are not necessary to underwrite a title policy. Because we are making risk-based decisions rather than rules-based decisions, we are willing to accept risk and write over certain things that may be encumbrances on the title, but that our models show will have a low likelihood of a claim and will have no impact on lenders or consumers.”
The methodology is approved by state regulators, fully accepted by all key stakeholders in the public and private secondary markets, and 100 percent reinsured by SCOR Global, the world’s fourth-largest reinsurance company. This enables us to expeditiously process claims, Kirk said. “If a claim is incurred, we do not deny or delay,” he said. “As a result, lenders do not need to change any of their processes, and they assume no increased financial risk because of the way we have architected our claims process.”
For these reasons, in contrast to the instant title solutions offered by other providers, Doma’s solution is “not just instant, but complete,” Kirk noted.
“Our title policy is just as broad but can be delivered in a faster period of time, without exceptions,” he said. “For lenders who are looking to introduce speed in the time to close and achieve a higher likelihood of closing, our solution enables them to operate more efficiently, saving them money, and have shorter rate locks and increased turnaround times.”
The Service Component: A Bespoke, White-Glove Approach
Onboarding: Laying the Foundation for Customer Success
Before Doma can process a lender’s first transaction, the team lays the foundation for customer satisfaction and success. The onboarding process for new customers officially begins with a kickoff call with the lender, serving as a formal introduction to the Doma team, as well as our capabilities and service model. Lenders then complete an extensive questionnaire to gather information about their volume expectations, market and competitive concerns, and any negative experiences they have had with former or current title partners.
Members of our concierge team dive deep into their organization’s goals, the needs of their customer base, and preferences for service and communication. These preferences are memorialized in SLAs that are continuously tracked and shared with the customer to ensure they are being met. SLAs commonly include:
- Concierge and production teams’ response time to customer inquiries
- Customer-impacting typing errors
- Funding times
- Faxback times
- Commitment delivery
With the SLAs established, after a few more meetings, the Doma customer success team completes the lender’s customer profile and account setup, and beta tests it to ensure functionality.
Last – but certainly not least – we ensure we integrate our customers’ loan origination software with title production software. Through the integration, lenders can create and manage title orders, oversee documents and structured data, communicate with Doma staff via a secure messaging system, and receive up-to-the-minute order status and notifications.
Doma currently offers solutions for three integration strategies:
- Integration with “middleware” systems such as ClosingCorp and TitlePort
- Direct integration with loan origination systems (LOS) such as Encompass
- A publicly available application programming interface (API) that provides developers programmatic access to a proprietary software application or web service
Depending on the integration approach required, customers can be up and running anywhere from a few days to a few weeks.
Once we know your technology and preferred integration approach, we counsel our customers on the most effective way to get integrated and the associated timeline.
As the relationship progresses, Doma seeks opportunities to optimize the integration and provides resources for the continued deployment of new enhancements and features when needed.
The customer onboarding process has officially concluded upon completion of the lender’s first 50 title orders. At that time, the Doma Customer Success team reviews metrics on time to close, any hiccups in the transaction flow, and common error rates, and identifies areas of potential improvement.
“Customers appreciate how thorough this process is and how we ensure there are no problems going forward,” said Nate. “This process ensures that borrowers have the best closing experience possible, and any lender who is focused on customer satisfaction rates appreciates that.”
Concierge: Single Point of Contact
At the center of every transaction we close is our best-in-class concierge service, a dedicated team member that manages every step of the title and escrow process. The concierge is the lender’s first line of support, reachable via a dedicated phone number and email address for each customer.
“The concierge is your single point of contact for managing the closing process from end to end,” said Kristin Miller, Head of Service Strategy at Doma. “Because our team is comprised of knowledgeable title and escrow experts who have dealt with thousands of previous transactions, they can quickly and accurately respond directly to a variety of questions and concerns.”
Concierge associates schedule all files; coordinate closings with the closing department, notaries, and homeowners; resolve ad-hoc challenges; and keep the transaction moving forward. While closings may seem like a straightforward customer experience on the surface, they are always subject to last-minute changes to the loan terms or the homeowner’s circumstances and availability, necessitating the need for multiple rescheduling or special accommodations.
The concierge also manages each customer’s SLAs, becoming intimately familiar with client nuances and preferences, and updating them as they change.
“This enables us to predict your requests and needs – and proactively offer them before you even have to ask for them,” said Timothy Picard, Doma’s Concierge Manager. “Imagine you are at dinner and your water glass is half empty, and your server fills it even before you have to ask them to do it. That is exactly what our concierge service is. Before our lender customers ask us for something, we have already offered it.”
Closing Report Card: SLA Review
As the closing progresses, we continually track each stage of the file against the lender’s predefined SLAs. We then transparently share these metrics with the lender, ensuring our team is supporting both their goals and their customers’ needs.
“We have spent the last year establishing our stance on accuracy and quality,” said Brittany VanBrunt, Business Operations Manager, and leader of Doma’s Operations Excellence team. “We want to ensure that we are continuing to process high volumes, but we also want to ensure we are doing it accurately, with the same level of quality expectations we have internally as a company.”
To achieve this success, Doma evaluates every closing file against more than a dozen SLAs. Metrics on these SLAs are reported to customers on a monthly basis, but members of our operations team examine them every morning and review them internally with Doma’s Customer Success team once a week. This ensures that any issues can be caught and resolved.
“Many lenders lack the ability to know how long it actually takes to move a file from end to end, and how consistently they are hitting their own goals for customer satisfaction,” Brittany said. “Because Doma is so data-centric – which is very uncommon in the title industry – our ability to focus on our lenders’ SLAs is what sets us apart from other title companies.”
Post-Closing QC: A Win for Our Team, Our Customers and Their Customers
Our white-glove service solution doesn’t end when closings are clear to close. Once a transaction is consummated, Doma’s Operations Excellence team conducts a thorough audit of every file to identify areas of improvement and further streamline processes. Once again, applying data analytics to measure the success of 27 different milestones across the life of a file, this post-closing quality control (QC) step ensures that all legal and regulatory requirements are met and a high-quality standard of care for every transaction is maintained.
“We check files as they transition through the closing process, as close to real time as we can possibly get,” said Jessica Shamoun, Doma’s Senior Director of Business Operations. “We look at these metrics on a holistic level, considering service, title and curative, and post-closing issues.”
The post-closing QC process compiles data that provides insights on varied transactional details, including:
- When issuing a title commitment, was the vesting accurate? Was the legal description complete?
- Did we capture everything we should have from a lien perspective? Did we use the lender’s preferred notary service? Were there any holdups in the notarization process?
- Were all appropriate documents dispersed? Was everything balanced properly? Were all signature lines correct?
- When closing documents were received, did we confirm that all required signatures were included?
- Did disbursement occur on time? Were all fees correct? If we shorted any fees, did we have to pay out any additional funds? How often do we have to collect extra fees?
Examining these elements ensures that every event in the closing happens consistently and correctly. The process also identifies any deficiencies that can be corrected to ensure lender satisfaction.
The result of this bespoke title service is a threefold victory: An efficient, exceptional experience for lenders; a convenient, hassle-free closing for borrowers; and continuous evaluation and accountability of our dedicated team.
To find out how our cutting-edge technology and customer service model can improve your lender operations, contact us at firstname.lastname@example.org