Many lenders have heard about how blanket portfolio protection can save them time and money, relieve examiner headaches, and make their operations more efficient with a far more customer-centric approach than tracking and force-placed insurance protection. But how is the premium calculated for various blanket protections? Read on to find out what the main considerations are for each type of collateral.
The last several years have been a whirlwind of change in the banking world, and this trend will only intensify as we move into a new decade. Technology advances are occurring at breakneck speed making it virtually impossible to keep up with. Who really heard of the terms “data analytics” or “cybersecurity” 10 years ago? Now they’re at the forefront of business planning. While the challenges to FI’s will be many, insurance on your loans doesn’t need to be.
Targeted growth in home equity lending for a community lender can be a daunting task. The “big banks” dominate as they control roughly half of that market. If a community lender isn’t actively marketing home equity loans and lines of credit offerings, they are giving up potential market share to a handful of banking giants.
Linking your in-house or local insurance agent with collateral and loan protection agents can be beneficial.
In today’s hyper-competitive auto loan market, lenders face the challenge of which products to provide to their borrowers in order to stand out; one of those products is an auto warranty. As automobile prices increase, so do the cost of repairs. With high automobile prices and high repair costs, even one major repair can cost more than the price of a borrower’s extended warranty.
During 2019 several insurance tracking vendors have canceled their relationships with numerous lenders throughout the country. Unfortunately, these vendors in many cases did not give adequate notice or time for the lenders to react and find an alternative. If you have already been forced to make a quick decision or are facing that decision, this blog post covers some options for you.
Many lending institutions made the decision long ago to outsource the important function of tracking insurance on secured loans including auto, mortgage, and equipment portfolios. From the outside looking in, this sounds like a perfectly logical process enhancement. After all, the very nature of making sure your collateral is insured can be cumbersome for an administrative staff already stretched thin with other duties. Unfortunately, sometimes the best-laid plans end up causing more grief than relief!
It is very common for community lenders to acknowledge the shortcomings of insurance tracking and force placing CPI coverage on borrowers. We often hear from community lender executives and collection departments, that even though CPI coverage and outsourced tracking still entails a lot of work and causes a lot of problems, they really don't see any other solution other than switching to another insurance tracker. Many are very excited to find out that there is another option.
Preparing for another Board meeting, studying the most recent Income Statement and reminiscing about the margins of days gone by...It used to be a lot easier to meet or surpass the board and/or shareholders' expectations.
The Federal Reserve rate was just reduced to 2.25% and as of August 1, 2019, the discount rate for institutions to borrow funds is 2.75%; however, all indications lead us to believe that there will be no further reduction this year.
Reviewing your lending institution’s collateral protection policies may not be at the top of your priority list. Who really wants to scour through the fine print of a policy that could easily exceed one hundred pages? These cumbersome policies are contracts that spell out the obligations of both the insurer and the insured using complex language and technical jargon which can be difficult to interpret. Due to the assignment of responsibilities to both parties, it is vital to take the time to understand your policies and the obligations outlined within.