The changes to the good faith estimate have increased the turnaround time between application and approval and thus negatively affected consumer satisfaction with mortgage originators, the annual J.D. Powers study found.
Meanwhile, a lender with a high technology-low human touch process ranked No. 1, while a similarly modeled company got a special mention.
David Lo, director of financial services at J.D. Powers, said its data show the average time from application to approval has increased to 27.5 days in 2010 from 20 days in 2009. As a result, the time frame for the entire origination process has increased to 52.1 days in 2010 from 46.9 days in 2009. And this is much worse than when compared with 2008, when the application to approval turnaround was 10.7 days.
Overall consumer satisfaction with mortgage originators has fallen from 739 (on a scale of 1,000) last year down to 734 for this year's survey.
The increase in refinancings apparently did not play any impact in the increase in time from application to approval.
However, the survey found the changes in the Real Estate Settlement Procedures Act did result in a decrease in the time from approval to closing, from an average of 26.9 days last year to 24.5 days, Lo said.
By company, Quicken Loans received the highest satisfaction score, at 826. Last year, the company did not have a large enough sample size to be included in the data.
Lo cited another online lender, ING, for having high customer satisfaction results, but added the company did not have a high enough sample size to be included in this year's results.
Last year's top company, BB&T, saw its score fall from 783 to 767.
At the other end of the scale are once again three of the nation's largest mortgage lenders: Bank of America at 676 (last year, Countrywide, now a part of B of A, was fifth from the bottom at 720); Citibank, 691 (last year's score 711); and Chase at 699 (713 last year). Flagstar Bank was fourth from the bottom at 708.
The worst rated company in last year's survey was the now defunct Taylor, Bean & Whitaker at 704, higher than the three bottom dwellers in this year's survey.