Back in early October, my wife and I made the decision to take advantage of the still-low mortgage interest rates by refinancing the remainder of our home loan. Though this was a good and well-intentioned idea, because of what we experienced (and, more accurately, what we endured), it turned out to be a major headache. And, it became a case study example of how NOT to deliver service value or demonstrate even basic consideration of the emotions involved.
To complete the loan process, as well as obtain the best available rates and most attractive fees, we could have chosen to go with an independent broker or refinance specialist, who would have handled everything with a minimum of fuss. From data I’ve seen, using a broker or a different bank is the route taken by about two-thirds to three-quarters of mortgage holders who refinance. Unfortunately, we decided to refinance through our current lender, Bank of America, one of the top five banks in the country. Big, BIG, draining, irritating and time-consuming mistake.
Like the classic visual of a small fish being swallowed by a bigger fish, and that bigger fish being swallowed by a giant fish, over the years our original mortgage lender has been absorbed multiple times by larger banks, until by now its loan portfolio is held by BofA, a financial mega-institution. We certainly didn’t choose them, and wouldn’t have. In customer sat and experience studies, this bank always gets the lowest possible scores. From what we have observed and gone through in the refinance process, it’s easy to understand why.
Service? Value? Customer focus? Proaction? If you like programmed and lame excuses, pathetic systems, poor communication, and bland apologies, then BofA may work well for you. It has taken us more than ten weeks after we sent initial paper work to close the loan. During this time, until we escalated our complaints to the refi team lead in New York, BofA bank employees (we’ve now had communication with a total of five BofA mortgage lending staff) were characterized by being either unresponsive to our refinance status inquiries or coming at us with inane questions and requests for more information.
Among the many impediments and back-filling delays we’ve encountered:
- After receiving the initial portfolio of papers to be submitted, now months ago, we were instructed to send these to a remote location, via fax. This was done through the local bank office, and we waited more than a half hour for the fax process to be completed, with all forms reported as received by the loan rep
- Having heard nothing from our loan representative for the next two weeks, we inquired via email about status. He informed us that the materials couldn’t be located. We then sent the materials again, in fact twice more (re-faxing and also mailing them, in suspenders and belt fashion, on the third try), with the same result. The papers, once sent, apparently disappeared into the ether.
- Each time we tried to contact the loan representative, via phone or email, we received no response for days or weeks. We were, during this period, contacted by a new loan representative, in a different state, who told us that he was taking over for the initial representative. The new rep was equally unresponsive, several times promising to update us (while apologizing for not having done so when we did connect), and either failing to communicate when promised, or, in fact, not at all.
- Even though we had been given no information about conditional or final loan approval, we heard from our homeowner’s insurance company. Surprise! The bank had informed them, without first telling us, that our loan was going to be approved; and they were about to change our policy status. We thanked the insurance company, which incidentally we like very much, and advised them to wait until they heard from us that a close date had been identified. Note: When everything was finally approved, we spoke again to our insurance company because they needed our approval to send a declaration page to BofA. They sent the page, and BofA couldn’t locate it.
It wasn’t until I copied the refi group head on a note to one of the brokers, advising him that his requests for still more information (two years worth of tax returns because their underwriters had mistakenly thought that we owned rental property) were outrageous, that the process was finally completed. This was almost three months after first submitting the refi application.
Are there prescriptives here? You bet, and they can be applied to every area of value that can be provided, and by any company. Having consulted with a number of banks, brokerage houses, and insurance companies over the years, the leading institutions make an effort to understand and streamline the customer journey, especially from an emotional delivery perspective. Where value is concerned, these banks proactively modify or develop processes and experience interactions to create more positive relationships. The results are the ability to more effectively market their portfolio of services, use the power of employee ambassadorship, and give bank customers the confidence and trust to assign a higher percentage of their investment assets.
As branded customer experiences go, this one couldn’t have been much worse. In our case, BofA has demonstrated little interest in building flexibility into their very inefficient, largely virtual, systems and ways of working with customers, or in providing any financial relief for the time, effort, and money we have invested to complete the loan refinance with them. The final insult took place in the last conversation with our broker rep, with him advising me that, after closing, we would be receiving a survey…..and I cut off his explanation before he ever got to the place where he would ask me to game the transactional research system. All in all, we’re ‘badvocates’ for the BofA mortgage lending process, some of which will be reflected in our survey responses.
Fortunately, there are other avenues by which displeasure can be expressed; and the Federal government provides several channels by which consumers can file mortgage process grievances (see their publication, “A Consumer Guide to Mortgage-Related Complaints”, for directions on how to contact the FCC’s Consumer and Governmental Affairs Bureau and Office of the Comptroller of the Currency). That’s exactly what we intend to do.