J.D. Power and Associates Reports: SunTrust Ranks Highest in Customer Satisfaction with Home Equity Line Servicers

WESTLAKE VILLAGE, Calif., Oct. 10 /PRNewswire/ -- SunTrust ranks highest in satisfying customers with home equity line of credit servicing, according to the J.D. Power and Associates 2007 Home Equity Line of Credit/Loan Servicer Study(SM) released today.

The inaugural study measures customer satisfaction with home equity line/loan servicers. Four factors are examined to determine overall satisfaction. They are, in order of importance: product features and functionality (40%), billing and payment (39%); funds access (17%); and contact (4%).

SunTrust ranks highest with a score of 770 on a 1,000-point scale, performing particularly well in product features and functionality. Following SunTrust in the rankings are Bank of America and Wachovia, achieving scores of 755 and 747, respectively. Bank of America performs particularly well in funds access, while Wachovia performs well in billing and payment.

Highly committed home equity borrowers are four times more likely to continue to do business with and recommend their lender to friends and family than customers with moderate levels of commitment, according to the study. A 5-percentage-point shift in customers from moderately to highly committed levels can generate a 5.7 percent increase in home equity balances for the typical lender included in the study.

The challenge for lenders is that overall customer satisfaction with home equity line/loan servicers averages 721 points, which is considerably lower than satisfaction with other financial products such as home equity line origination (averaging 766 points) and primary mortgage servicing (averaging 798 points).

"Servicing a home equity product involves considerable complexity, particularly when compared to the origination of home equity or primary mortgages, which may explain the lower satisfaction level," said Tim Ryan, senior director of the finance and insurance practice at J.D. Power and Associates. "Customers can make multiple draws on their home equity line accounts, apply for increases to their credit limit, and have a wide array of lock features and access methods -- all of which can be confusing. However, lenders can demystify this by providing ongoing communications to their customers and by emphasizing the convenience that a home equity line of credit provides. Ultimately, providing a clearer understanding of the product can lead to increases in credit line usage among these customers."

The study finds that customer satisfaction with lenders tends to vary according to borrower usage patterns, which fall into three categories: low- usage (carrying a balance up to 25 percent of the credit limit); moderate- usage (balance between 26 percent and 75 percent of the credit limit); and high-usage (balance greater than 75 percent of the credit limit). Overall customer satisfaction is highest among moderate-usage customers, averaging 764, compared with an average of 735 among low-usage customers and an average of 708 among high-usage customers.

The study also finds that there are distinct differences in how high- and low-usage customers use their home equity lines of credit. Approximately 52 percent of high-usage customers report that they use their home equity line to pay off bills -- similar to how a small business would use an operating account-compared with only 22 percent of low usage customers. In contrast, low-usage customers are more likely to use their home equity line as emergency funds and for education expenses, in a manner similar to how a business would fund a capital expenditure.

"It appears that high-usage customers use their home equity accounts to help balance their budgets and manage their financial obligations, while customers with lower and moderate levels of usage tend to obtain funding proactively to help finance anticipated expenses or to cover unexpected expenses," said Ryan.

USAA, a financial services provider open only to the U.S. military community and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.

The 2007 Home Equity Line of Credit/Loan Servicer Study is based on responses from 4,964 customers who originated a home equity line/loan between October 2006 and June 2007. The study was fielded in June and July 2007. To view ratings of home equity line/loan servicers, visit JDPower.com.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2006 were $6.3 billion. Additional information is available at http://www.mcgraw-hill.com.

    J.D. Power and Associates Media Relations Contacts:
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    Troy, Mich.           Westlake Village, Calif.
    (248) 312-4119        (805) 418-8103
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    Customer Satisfaction Index Scores
    (Based on a 1,000-point scale)

    SunTrust               770
    Bank of America        755
    Wachovia               747
    WaMu                   746
    Citizens Bank          737
    National City Bank     729
    U.S. Bank              726
    Industry Average       721
    Wells Fargo            721
    ABN AMRO Mortgage      713
    GMAC Mortgage          710
    CitiMortgage/Citibank  709
    CitiFinancial          708
    Chase                  697
    Countrywide            693
    Fifth Third Bank       691
    HSBC Mortgage (USA)    656
    Beneficial             646

    USAA  901

Note: USAA is a financial services provider open only to the U.S. military community and their families and therefore is not included in the rankings.

Included in the study, but not ranked due to small sample size, are: Ameriquest Mortgage; BB&T; Capital One, NA; Charter One Bank; First Horizon; Homecomings Financial; and National City Mortgage.