The Beacon- May 2019
Spring is finally upon us, and we’re excited to have a lot to share with you! Here are some of the latest headlines at SIR, as well as valuable insights on current topics within the consumer reporting industry.
Expanding Your Equity Lending Portfolio with Insured Loans
It’s no secret that today’s market conditions are ideal for equity lending. However, in many cases lenders are still being forced to deny credit-qualified applicants who lack sufficient home value to support underwriting policies requiring 75-85% Max Combined Loan To Value (CLTV). As a result, many lenders have begun to realize they aren’t reaching their market potential.
“We found ourselves turning away potential business,” says Jeff Geddes, SVP of Torrington Savings Bank.
Jeff’s dilemma is not unique but rather a common lending challenge- How to address high-LTV scenarios without turning away borrowers. In the post-recession market, lenders have been bound to the notion that it is best practice not to exceed 80% CLTV on HELOC’s or HELOANS. But with a popular product from SIR, lenders are expanding this threshold, and as a result, increasing potential business.
This product, known as Protequity, is an exciting tool that’s enabling lenders to expand their equity lending portfolios through insured loans. This product allows lenders to combine their expertise with an A+ rated insurance carrier to mitigate the effects of borrower default. With Protequity, lending programs can now be customized to reach up to 100% CLTV, and up to 130% for home improvement lending.
In 2015, Jeff and his team turned to SIR to implement this program, and have been delighted with the results. To date, Torrington Savings Bank has closed nearly 100 loans under the program, resulting in about $3 million added to their servicing portfolio. They began using the program for equity loans and have since expanded the offering to borrowers applying for HELOCS.
As their portfolio grew, they began to see new opportunities with credit-worthy borrowers who found themselves in similar high-LTV situations. “It came to the point where people began to specifically seek our product, and it was something we could even optimize our web keywords for,” says Geddes. They are now getting new business through referrals from happy borrowers who would otherwise have been turned down.
With Protequity, underwriting is delegated on the front-end, making the process easy. Institutions are given very reasonable underwriting guidelines, and can request exceptions as necessary. “For our program, our team actually increased the minimum credit score requirement that was offered in the program guidelines,” Geddes says.
Torrington Savings was among the first institutions in Connecticut to explore the program back in 2015, and according to Geddes, they’ve set an example. “I think we’ve really turned some heads and started a movement,” he says. Geddes notes that he’s most proud of helping customers fulfill their dreams and take care of necessary home repairs that would have been unavailable otherwise.
Community banks and credit unions know the hardship of turning away potential lending opportunities. However, Protequity is changing the practice of relying on CLTV to make these decisions. Credit-worthy consumers are a valuable segment of your lending clientele. Don’t let them slip away.
To learn more about SIR’s Protequity program, email us at [email protected], or call us at 800.332.9479.
Insight and Action- Inside the Consumer Lending Summit
As financial institutions approach the turn of yet another decade, the lasting effects of the recession have continued to have an impact on our economy. Regulators have imposed substantial new obligations. Technology continues to drive consumer demand, as well as the expectations of our products and services. And in the midst of it all, financial institution leaders, lenders and marketers are left to map out strategies for success. Much to their relief, Thursday’s Consumer Lending Summit provided valuable insight on which they can build.
This year’s Summit was held in Springfield, Massachusetts at the all new MGM casino for the first time in the event’s history. Complete with more than a half dozen compelling keynotes, delicious meals provided by the MGM, and special giveaways, the Consumer Lending Summit was once again a success.
After a brief introduction by SIR President Maureen Devine, Michael Carter took the floor. Carter is the Executive VP at Strategic Resources Management, a banking consulting firm, gave an inspirational dialogue on the digital trends impacting the payments landscape. “There is technology out there today that can make community banks competitive,” said Carter.
Carter’s keynote was followed by a short intermission, after which, our feature panel took the stage to discuss the outlook for consumer lending. The panel was comprised of Denise Walker, senior vice president of Country Bank; Jeff Smith, senior vice president of Freedom Credit Union; Norbert Deslauriers, VP and retail lending manager at Guilford Savings Bank; and Lynn Liquornik, VP at Mass Mutual FCU. The panel was moderated by Jonathan Plummer, senior vice president of Bangor Savings Bank. Among the topics covered in the conversation were the industry trends in credit card usage, HELOCs and student lending.
After the conclusion of the panel, Michael Goman from Accubranch presented us with a valuable info session on how lenders can position their physical facilities to best drive business. He explained how market analysis and real estate activities can help you make valuable decisions.
Goman’s session was followed by a delicious buffet luncheon provided by the MGM.
The afternoon began with a discussion led by Brent McKown, a Lending Analytics and Product Manager at CSI. He provided insights on customer acquisition and digital banking, as well as cybersecurity and compliance. When discussing customer acquisition, McKown noted, “40% of bankers identified loans as the single most important channel for attracting customers in 2019.”
McKown’s presentation was followed by a panel consisting of President Maureen Devine and EVP Jackie Drziak of Strategic Information Resources. The two conducted an open dialogue on credit industry trends that will impact consumer lending decisions and initiatives in 2019 and beyond. They agreed that while recent innovations in credit reporting have held pace with meeting lender needs in every stage of the lending life cycle, they anticipate more regulatory changes ahead in the reporting of data.
Before the curtain was closed on 2019’s summit, attendees were treated with a live demo hosted by Danielle Walker of SharperLending, outlining ‘Verisite’- a new lending tool designed to help financial institutions close equity loans faster. “With the help of mobile technology, the Verisite app allows lenders to get an accurate, comprehensive inspection of the property in seconds,” says Danielle.
And with that, 2019’s Consumer Lending Summit was complete, but not before the drawing of SIR’s raffle prize- a brand new Amazon Echo Plus, which was presented to Sandra Pearson of Country Living Loans.
SIR is proud to have been once again the primary sponsor of the Summit. When experienced minds and innovative ideas come together, the result is something truly special. We look forward to seeing you in 2020.
Green to the Core: How Green Incentives Are Changing Equity Lending
There’s no denying that home improvements are playing a larger role in the lending landscape. As a result of rising interest rates, a typical homeowner today has owned their home 10 years longer than the average homeowner a decade ago. Of course, this phenomenon would suggest that consumers are less likely to sell and more likely to remodel their homes. And the numbers back the trend- Over $192 billion was spent by U.S. homeowners on home improvement last year, financed in part by $57 billion in loans.
Facing rising energy costs, many of these remodelers are seeking ways to become energy independent through environmentally sustainable home improvements. And in the U.S., new government-sponsored financial incentives are helping these homeowners reap the benefits of “going green”. In fact, the percentage of green single-family remodelers is projected to double within the next 3 years.
As consumers become more aware of the potential cost savings associated with these energy-efficient upgrades and the incentives available to them, there is increasing demand for easy access to accessible information about green incentives.
That’s why SIR has partnered with IncentiFind, a dynamic new company that provides the nation’s largest database of green incentives available to property owners looking to greenify their homes.
Together, we’re providing the Green Report, a summary of green incentives customized to the consumer based on their project’s location, scope of work and asset type.
According to IncentiFind’s database, there are more than 12,000 green incentives available to homeowners in the U.S. This number is on the rise, as states continue to develop legislation that encourages green retrofitting. In 2018, 14 states passed significant solar policy legislation, making it even easier for consumers to make green renovations.
The Green Report is making it simple for consumers to find out just how they’ll benefit from these policies- and put more money back in their wallet. According to IncentiFind, consumers could realize a 10x return on their investment through funding from incentives.
The report is a valuable asset to homeowners because it is accurate, convenient, and easy to comprehend. Sifting through government documents can be a pain, and the Green Report eliminates this burden entirely. It also enables homeowners to proceed with peace of mind knowing the data provided is complete, current and accurate. Since the Green Report is designed specifically with the consumer in mind, all data is prepared in a user-friendly format that’s easy to comprehend.
With the Green Report, lenders have a new marketing tool, and homeowners can save money on energy-efficient home improvement projects, making it a true win-win. Call SIR at 800.332.9479, or email us at [email protected] to see how you can join the green lending movement with the Green Report.