Keynova Group, the leading competitive intelligence source for digital financial services, today announced the results of its 2022 Mortgage-Home Equity Scorecard, a consumer experience benchmark evaluating the top 12 U.S.-based mortgage and home equity lenders. Bank of America secured first place overall in this annual Scorecard, which assesses the digital channels of leading bank and non-bank lenders used by consumers to evaluate and apply for a mortgage, refinancing, or for home equity needs. The 2022 Mortgage-Home Equity Scorecard reveals key industry trends, including the integration of home buying services, which are becoming a mainstream component of the mortgage origination process, the increasing use of incentives to drive consumer engagement, and expanded access to digital or hybrid-digital closing options.
“Rising interest rates make a positive lending experience throughout the end-to-end digital home buying journey essential in generating closed loan volume,” said Beth Robertson, managing director, Keynova Group. “Capturing the homebuyer’s attention at the beginning of the process with home search support, informative content, an array of loan products, and meaningful incentives is key to yielding retained long-term customers.”
Lenders Drive Closings with Integrated Home Buying Services
Home buying services have emerged as an integral piece of the digital support that mortgage lenders are offering prospective homeowners to assist with the complex home buying experience. These suites of digital services extend beyond an application to encompass planning, budgeting, education, and property search services. In 2017, PNC Home Insight Planner was a market pioneer by integrating a comprehensive user profile, a goal-oriented budget, and home-search resources to help applicants identify properties that meet their needs. Today, 50% of the lenders evaluated in the Scorecard offer a property search option that identifies suitable properties, connects prospective homeowners to real estate agents, and provides consumers with tools and content to inform their journey.
Incentives Help Drive Applicant Engagement
In what has been a tight and highly active real estate market, incentives are helping lenders drive engagement and generate higher closed loan volumes. Today, 75% of lenders offer a mortgage or refinancing reward or incentive program. These include rewards for using property search services, discounts or money toward closing costs, automatic payment discounts, rate-match incentives, and reduced interest rates or closing cost credits for existing customers using other services. As an example, Bank of America’s industry-leading Preferred Rewards Program encompasses numerous product lines, including home lending, and offers tiered benefits such as discounted mortgage origination fees or reduced home equity rates. Another interesting offering, supported by close to 20% of lenders, is an on-time closing guarantee, an option that can enhance consumer confidence in the lender’s commitment to ensuring an efficient home buying experience.
Digital Settlement Streamlines a Remaining Hurdle
Digital closing remains an opportunity for most Scorecard lenders to create a fully online experience that simplifies processes and builds end-user value. Digital settlement options are now offered by 42% of the Scorecard’s mortgage and refinance lenders, while 33% support the option for home equity products. Since regulations can still prohibit the full settlement process from being handled electronically, hybrid options, such as those offered by Guaranteed Rate and Rocket Mortgage, can be used to enable applicants to sign most documents electronically and meet in-person to sign remaining documents that may require the presence of a notary or attorney.
Innovative Initiatives Balance Some Continued Home Equity Suspensions
As rising home prices and interest rates potentially cool the market for new home purchases, lenders may see reinvigorated interest in home equity lending. Currently, home equity suspensions continue at Chase (since April 2020), Wells Fargo (May 2020), and Citi (March 2021), yet other lenders are launching new initiatives. Guaranteed Rate is the first non-bank lender in the Scorecard to launch an innovative fixed-rate HELOC with same-day approval, digital closing, and the possibility of obtaining funding within five days. Comparatively, 42% of lenders offer a fixed rate conversion option for variable-rate HELOCs, while two bank lenders - Citizens and U.S. Bank - actively promote digital home equity closings. Additional updates include 25% of lenders offering Spanish-language home equity content, and 17% supporting live chat for home equity lending.
About the Keynova Group Mortgage Home Equity Scorecard
Keynova Group’s annual Mortgage-Home Equity Scorecard, syndicated since 2005, objectively reviews the digital capabilities and user experience at 12 of the top bank and non-bank lenders in the U.S. This includes eight of the largest financial institutions in home lending: Bank of America, Chase, Citi, Citizens, PNC, Truist, U.S. Bank, and Wells Fargo, and four of the largest non-bank home lenders: Freedom Mortgage, Guaranteed Rate, loanDepot, and Rocket Mortgage (formerly Quicken Loans). For more information, please visit https://www.keynovagroup.com/scorecards/#credit-cards-and-lending.
Keynova Group is the nation’s foremost competitive intelligence firm providing trusted benchmarking insights and analysis of consumer and small business digital financial services, including banking, credit card, home lending and insurance. Since 1999, Keynova Group’s Scorecards have served as the go-to source for leading financial services firms to obtain reliable competitive intelligence and actionable insights. The firm’s proven methodology and highly detailed results help its clients maximize the value of their digital channels to deliver a premier experience to customers and prospects.