May 17, 2016
For years, technology advances along with a wide variety of cost-effective, quality loan origination and servicing solutions have made it possible for banks and credit unions to outsource their manufactured home loan services. Yet bank and credit union executives still assume that hiring in-house staff is the only option they have to provide the services their customers or members have become accustomed to. Quite surprisingly, this is one of the reasons many financial institutions have never explored the benefits of outsourcing their manufactured home loan services.
But the rules of the game have recently changed. The current lending environment, with continuously increasing regulatory requirements, and the competitive pressures, which are forcing financial institutions to focus more on their core competencies, along with the cost and complexities of the latest, must-have software solutions that often go beyond the capacity of small banks or credit unions have influenced C-level executives towards outsourcing.
If your loan portfolio also includes manufactured home loans, but you’re still hesitant about outsourcing your services, here are three benefits of outsourcing you may not have known about.
A Higher Closing Ratio
By enlisting the services of an experienced manufactured home loan origination and servicing company, which provides an accurate, reliable and trustworthy solution that meets your specific outsourcing needs, you’ll be able to increase your lending potential and closing ratio significantly. According to a research paper published by the Haas School of Business at the University of California Berkeley, “a 10-percent increase in the number of loans (…) [issued] by a credit union (…) represents a 10-percent increase in its service flow, [which is] proportional to new loan originations.” Having a service provider to perform tasks like applicant screening, loan origination, payment processing and collection, portfolio performance monitoring, compliance and quality control, etc. will free up your loan officers to focus more on sales, which will boost your closing ratio without you incurring the extra cost of recruiting, training and retaining additional in-house staff.
Lower Delinquency Rates
Though the delinquency rates on real estate and consumer loans have been declining continuously since 2010, managing delinquent accounts and collections in-house remains one of the most challenging, time-consuming, and expensive tasks for a financial institution with a diversified portfolio. Besides the high costs associated with payment collection efforts, any time spent on collecting means time away from participating in other activities that could contribute to the success of your institution. What’s more, your employees may not always have the necessary time to handle complex collection activities. This can cause delinquency rates to increase, which may lead to cash flow problems. If you utilize a reliable third-party manufactured home loan service provider that specializes in debt collection, your bank or credit union will be able to reduce collection time and costs, on one hand, and increase collection rates, productivity and revenue, on the other.
Improved Customer Retention
A reputable manufactured home loan origination and servicing company will enable your institution to offer higher quality, more stable services that better meet your customer or member needs. Outsourcing will also: minimize processing errors, which will accelerate the loan origination process; reduce the risk of non-compliance, improving your institution’s reputation; and give your loan officers more time to focus on improving the relationship with your customers or members. All these will lead to improved customer satisfaction and retention.
Though the benefits of outsourcing manufactured home loan services cannot be denied, it is the responsibility of the bank or credit union to find a trustworthy manufactured home loan service provider that can help it improve its value propositions, offer its customers or members high-quality services and expand into new markets.
At Triad Financial Services, we’re well aware that your financial institution has a duty of care to its customers or members. With your institution’s reputation and future at stake, failure to deliver on the promise and meet regulatory requirements is not an option.
To provide the best service quality, not only do our experienced professionals ensure full compliance with applicable rules and regulations; they also know how to account for the unique challenges posed by the manufactured home lending industry. Therefore, they can provide expert advice on the best investment alternatives for your loan portfolio and the risks potentially arising from adverse business decisions or improper implementation practices.
To explore a unique 360-degree view of the latest manufactured home loan origination and servicing solutions, or to learn more about our product range and service offerings, call us today at (800)-522-2013, Ext-1287.