By Chris Meade
The fourth quarter of the year is upon us – but 2021 isn’t over yet. Every financial institution wants to close the year strong – but I have yet to meet a lender with loads of extra time to cram a bunch of new initiatives into the end of the year.
So, I put my “busy lender” hat on and came up with three straightforward Q4 action steps I think will help almost any institution close the year strong and sail into 2022 on good footing. Whether you do all three things or just one, I think you’ll be glad you did.
Capitalize on a Key Q4 Marketing Opportunity
The holiday season is a high-spend time for consumers, and most turn to credit when it comes to funding extra purchases and travel. Using a HELOC rarely comes to mind; most consumers unconsciously keep doing what they’ve always done, without thinking through all the financial details.
Before the holiday madness begins, getting a lower-interest home equity line of credit in place could make a lot of financial sense for your borrowers. In contrast to the more common strategies of higher-interest credit card spending, a personal loan, or depleting a savings account, a HELOC is an under-utilized tool. Not only does it offer lower interest rates than other forms of credit, but once it’s in place, offers the flexibility to only be used when needed.
With homeowners sitting on more home equity than ever, this fall is the perfect time to run a HELOC promotion for the upcoming holidays. Use bulk AVMs to run a hyper-efficient and super effective campaign that targets only homeowners with a significant amount of equity or those who are eligible to increase their line of credit.
And … once you’ve run your bulk AVM order, you’ll be equipped with useful data for 2022 planning and goal-setting. The number of homeowners with a significant increase in property value can help you set targets and plan future home equity lending campaigns.
Conduct a Real Estate Portfolio Health Check-In
Most lenders know it’s a good idea to keep tabs on the real estate collateral securing their loan portfolio, but this is a task that falls easily to the wayside with so many other competing priorities. Before you know it, years have slipped by without knowing if a property is being maintained in a way that protects the lending institution in case of foreclosure.
Particularly if you are keeping tabs on a list of properties at risk of foreclosure, running a bulk property conditions report (PCR) is one of the most simple and efficient ways to gather information. Instead of dispatching someone on your team to take pictures and scout the property, a PCR does the legwork for you. It will report on the real physical condition of the property and variables affecting its market value. It’s a cost-effective alternative to appraisals for managing risk, and helps you get prepared for potential work ahead.
It’s been a while since you’ve done this kind of real estate health check-in, using a bulk PCR tool makes it simple to add this to your end-of-2021 to-do list.
Prepare for 2022 HMDA Reporting Requirements
Are you a lending institution subject to Home Mortgage Disclosure Act (HMDA) reporting requirements? Though you may be trying to put it out of your mind until closer to the March 1, 2022 deadline, there’s a case to be made for taking some preparatory actions now.
The last quarter of 2021 is a good time to find, or reexamine, your HMDA reporting provider to ensure you’ve got the right solution in place. You’ll want this intact by the end of the year – trying to implement a new solution after Jan. 1 is going to make an already heavy-lift that much harder.
Without a HMDA provider, it can be a daunting, weeks-long task to export, validate, and upload the vast rows of required data. If by the years’ end, you have a HMDA compliance solution in place that can validate information per file, then as March 1 draws near, your key task will simply be to export the already-validated data in the required format and upload it. Your Q1 2022 self will thank you! (By the way, the LenderClose HMDA compliance tool is very cost-effective and can be used as a stand-alone product if desired. Existing clients can simply reach out to your relationship manager to have the tool enabled.)