How often do products come along that can significantly change your operation in a positive way? Lenders from all across the country face similar challenges when it comes to balancing budgets, managing workloads, and staffing levels while growing at the same time. Growth is great but means more files, more data, and more work for everyone.
Some vendors in the world of lending ask their customers to sign lengthy multi-year agreements and some also make it difficult to leave the agreement prior to the terms expiring. Read on for more information about negotiating contracts with vendors.
First, you need to read the contract and pay special attention to the following:
- Length of the term
- Terms of exiting the contract early
- Automatic renewals
- Conditions for both parties
To properly answer that question, you have to look at the entire program and the many different parts that are often overlooked. There are four different coverage sections that you should be evaluating:Lender-placed Hazard
Coverage for REO property
Liability insurance for REO property
Many lenders who still manually track mortgage insurance may have heard of a solution to tracking mortgage collateral insurance called Blanket Mortgage Insurance. But what does blanket mortgage protection typically cover? The master policy in many cases is identical to what would be issued in the typical tracking and lender-placed scenario. The same limits can be obtained, and all the same coverages and exclusions still apply. Some companies offer other versions of blanket mortgage, so it is important to clarify exactly what’s covered and what’s not. Blanket Mortgage can cover all real estate in your portfolios and can be separated out by portfolio.
This can be a touchy subject because of the close relationship that many lenders have with automobile dealers. However, that does not change the fact that there are serious concerns that should be taken into account by lenders when they finance Gap Waiver. Most lenders don't realize that Gap Waivers state clearly that they are addendums to your loan agreement and affect the way your loan performs when there is a total loss. When you finance a Gap Waiver, did you know that you, the lender, are agreeing to waive much or all of the remaining balance when your borrower’s primary auto policy doesn’t pay off the loan?
Is it time to take another look at your consumer auto loan collateral protection and insurance tracking? More and more lenders have begun to realize the shortcomings and administrative hassles common with Collateral Protection Insurance (CPI) programs using outsourced tracking.