Equity lending: A vehicle for revenue and member retention

first_imgGreat news. Mortgage rates are rising. Why is this great news, you may ask? Because rising rates are making home equity lending a prime target for homeowners in search of additional liquidity. A surge of home equity lending can bring big opportunities for credit unions. Rising rates aren’t the only factor contributing to this surge. According to National Mortgage News, about $150 billion in home equity lines of credit are due to reset in the next 48 months, likely raising rates and monthly payments.Home equity lending can lead to big revenue and member retention opportunities for smart and prepared credit unions. So get ready. Equity lending is making a return.Why equity lending? The math is simple. If you don’t offer equity lending, your members who want equity loans will be forced to go elsewhere. Right there, you’re opening the door to member attrition. You have to provide the products your members need.We’ve all heard the numbers. It costs roughly six or seven times more to acquire a new customer than to retain an existing one. (Note that I am using the word “customer” rather than “member” because this research was not credit union-specific, but it does apply to credit unions.) There’s more. The likelihood of selling to an existing customer is 60-70%, but the likelihood of selling to a new prospect is around 5-20%. Here’s another interesting statistic: reducing customer defection by just 5% can increase profits by 5-95%. One study indicated that a mere 2% increase in customer retention has the same effect as decreasing costs by 10%. Bottom line, you’ve got to hold on to your members. It’ll cost you if you don’t.Most financial institutions—big banks, regional banks, and credit unions alike—offer discounts and perks for members and customers that adopt more of their products. Once your member becomes a customer of another bank, you’ve opened the door to all kinds of cross marketing opportunities. By the time your member adopts automatic deposit, a new checking account, an auto loan, or any other type of service with the new institution, your relationship will already have been significantly weakened.What to do?Smart credit unions will start getting their ducks in a row now, if they haven’t already. In other words, if you have a home equity lending program, is it fast, efficient and compliant? If you don’t, you should start putting a program in place.Whether you’re looking to update your current equity lending program or create a new program altogether, running an efficient, fully compliant program doesn’t have to be difficult. The first step is making sure you understand the regulations. The National Credit Union Administration (NCUA) has definitive guidelines for a lot of the activities in the equity lending process, from the type of collateral evaluations one needs, to the processes for testing and validating analytical models—like AVMs, the de facto standard for equity lending transactions. The second step is to make sure your processes meet those guidelines and regulations, and do so with efficiency.Learning and navigating the twists and turns of regulatory guidelines is a lot to handle. It can take considerable time and effort. One of the shortcuts you can take is to speak with an expert. Your vendors are a good place to start. For example, at New Vista, we have been serving credit unions for eight years. We know the landscape, from member expectations to credit union-specific guidelines and regulations. In fact, we have a full line of tools that address the special needs of credit unions.We have found that one of the best ways to assure efficiency—which includes providing the speed and service that protects member relationships—is to leverage a powerful platform and bundled services from one provider. Our one-stop shop will cut your vendor interaction down to one easy order platform, one invoice and one point of contact, which has the power to streamline Home Equity processes for your entire team, including your members.   Having a vendor manager that understands and focuses on your unique needs, can save a lot of headaches—and lost relationships—down the road.Choose wisely. The right vendor can make stellar member service a given. It can enable your credit union to focus less on problems, and more on the products and pricing that serve its needs and the needs of its members. 35SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Jesse Rivera Jesse Rivera is responsible for the profitable growth of the company including strategic partnerships, business development, and account management while ensuring excellence in operational fulfillment of all functions performed by … Web: www.newvistasolutions.com Detailslast_img read more

Jamaica’s Tourism Minister to visit North America/Europe on SOE fallout

first_imgTourism Minister Edmund Bartlett is to visit North America and Europe this weekend as Jamaica moves to quell any fallout from its decision to impose a state of emergency in St. James, where the island’s tourist resort of Montego Bay is situated.Bartlett told a news conference that the authorities have already developed “a comprehensive program with our partners” from the three major markets, including the United States, Canada and the United Kingdom.nsure future bookingsHe said from this weekend he would be moving to “cover those markets to meet with all our partners and to ensure future bookings, because I think that the winter (booking) is holding and that’s the message we want to have.”He said the concerns for the authorities here would be future bookings adding “we want to look to make sure that we shore up the summer and the fall because we are pushing to inch into the five million arrivals this year.”The government introduced the state of emergency last week Thursday in a bid to deal with the rising criminal activities including murder in that parish. Last year, more than 300 people were killed in St. James and the authorities have said more than 200 people including those wanted for murder have been detained under the state of emergency.Jamaica is being made saferBartlett said that Jamaica would continue its aggressive public relations campaign noting “we are out there, and we are making the point that Jamaica is being made safer”Earlier Prime Minister Andrew Holness told reporters that he is “prepared to do what it takes to address this crime problem” and warned ‘all of what we are doing is threatened by the security situation in Jamaica.”He said crime is but one aspect of the island’s security and his administration was also concerned about its ability to protect and control its borders, telecommunication and financial services among other sectors.He dismissed the notion that the state of emergency is all about dealing with the crime “in our faces, the murders, and the public disorder” adding “it is also to deal with what I like to call an eco-system of criminality at an enterprise level.last_img read more