Are your loan profit margins declining every year? If the answer is “yes,” you are not alone. This is a common challenge in the servicing industry, as outlined by the Mortgage Bankers Association’s Vice-chairman J. David Motley in his opening remarks at this year’s MBA National Mortgage Servicing Conference:
 
“But we've never experienced the kind of prescriptive, regulatory requirements that have been imposed on us over the last two to three years. In 2012, our delinquency rate was just over four percent. We never got above six percent, even in 2009. Our cost per loan serviced went from $130, a new high at the time, to $195 this year. Not because of increased defaults. In fact, our default rate has dropped to 3% overall. The increase in cost was primarily due to increased expense associated with new regulation and the people, systems and process changes necessary to implement those regulations.”
 
Motley later in his speech said: “In the Consumer Financial Protection Bureau, we have a new regulator with unprecedented oversight authority. The Agency has instituted thousands of pages of regulations that affect the way we do business every day. Implementing the servicing rule's requirements necessitated system changes and staff training which had an incredible impact on our business operations, and bottom line…duplicative and overly burdensome state regulations are presenting new layers of complexity for servicers and consumers.”
 
As a result of the aforementioned regulatory changes, mortgage servicers have had to hire additional compliance staff and hone in on third party vendor performance. Of course, these actions are going to negatively affect the bottom line. While compliance is necessary for the protection of each homeowner’s rights, servicers are understandably seeking ways to turn a profit while meeting compliance.
 
With the overarching theme of compliance at the MBA Mortgage Servicing conference, the Lanvera team heard the same six resounding questions from servicers:
1. How can I maintain compliance on all statements, letters, notices, and other documents?
2. What are some best practices in avoiding lawsuits?
3. How can I net more profit per loan?
4. Are there any other ways I can increase eAdoption and decrease print and mail costs?
5. How do I reduce my call center volume?
6. What are some ways I can improve the borrower experience without cutting into my margins?

Now consider this: What if you had transactional document solutions that could save you up to $5-7 per loan annually, net an additional $3-$11 per loan annually, reduce call center volume, increase eAdoption, improve the borrower experience, and maintain compliance on all statements, letters, notices, and other documents? Sound too good to be true? It’s not! Click here to learn more.

While regulatory pressures continue to escalate, mortgage servicers have to remain compliant while keeping margins at a reasonable level.

According to The Worthington Daily Globe, people in the Worthington, MN area received a phishing text that looked like it came from Fulda Area Credit Union (FACU) claiming a discrepancy or problem with the recipients’ accounts on Monday morning, February 15, 2016. Upon further investigation, these SMS messages were from scammers who targeted both members and non-members, indicating there was not a breach in FACU’s core, but rather a purchased list of phone numbers.

“It seems to be a classic phishing attempt where they just target a group of phone numbers trying to get information,” said Laura Honken, vice president of operations for Fulda Area Credit Union (FACU). “It just seems they’ve probably purchased a block of phone numbers and started out with that.”

Although Monday was a federal holiday, FACU employees acted quickly in order to ensure that their members and potential members’ information is safe and the brand is protected. 

“It is our priority to make sure that if anybody did click on that, we are getting them protected as soon as possible,” Honken said.

Aside from immediately reporting the scam to authorities and cell phone carrier fraud departments, FACU employees started closely monitoring the credit union’s official Facebook page to field member questions, as well as answered the phones at the Fulda and Worthington locations. 

As new details are sure to unfold, we want to first give kudos to FACU employees for their proactive approach in helping members and non-members ensure data safety. Secondly, we want to provide some quick tips on how to quickly and effectively communicate emergencies to members:

1. Designate “important messaging” areas on your ePresentment and Home Banking platforms.
2. Ensure brand consistency across all delivery channels so that members do not click on something that does not match your brand.
3. Utilize member statements to provide instructions on how to handle suspicious activity/data compromise, as well as contact information.
4. Communicate prevention methods in the onboarding process.

Member communications do require frequent revisions in order to maintain compliance. However, the following steps from the FTC to consumers on avoiding a phishing attack via text or email are a great start:

• Use trusted security software and set it to update automatically. 
• Don’t email personal or financial information. Email is not a secure method of transmitting personal information. 
• Only provide personal or financial information through an organization’s website if you typed in the web address yourself and you see signals that the site is secure, like a URL that begins with https (the “s” stands for secure.) Unfortunately, no indicator is foolproof: some phishers have forged security icons. 
• Review credit card and bank account statements as soon as you receive them to check for unauthorized charges. If your statement is late by more than a couple of days, call to confirm your billing address and account balances.
• Be cautious about opening attachments and downloading files from emails, regardless of who sent them. These files can contain viruses or other malware that can weaken your computer’s security.
  
  ​To learn more on how to effectively handle data safety compromise, click here.

We live in a fast-paced world where customer communication expectations are higher than ever. The anticipation of a more personal interaction and simplified user experience has challenged banks to think of new ways to increase customer retention and encourage growth. This leaves many banks with the strategic question of adding value to daily customer interaction and experiences without negatively impacting the bottom line.

ADD A PERSONAL TOUCH
People like to feel recognized and known. Personalizing customer communications is an effective way to let customers know that they are individuals with specific needs rather than “just a number.” Furthermore, it creates a better user experience and is the difference between disruptive content and useful material...

To view the rest of our article on adding value to the customer experience without increasing costs, visit CBInsight.com. 

By December 2015, credit unions saw massive growth in auto loans with balances projected to reach the highest to-date: $264.7 billion, according to Callahan & Associates. Furthermore, credit unions bagged 16.5% of the auto market, which is the highest year-end rate since December 2009 at 19.9%.

In an effort to aid credit unions in their continued pursuit of auto lending portfolio growth this year, here are some ways to utilize member-facing documents to meet this strategic goal:

Segment Your Audience
Because there is no such thing as a cookie-cutter member, standard marketing will not produce the same response rate as segment marketing. According to MailChimp, segmented email campaigns see 59.99% more clicks than non-segmented campaigns.
Incorporating targeting and personalization in your documents using business rules and workflows provides the ability to significantly improve your print marketing ROI. 

Make it Easy to Respond
Many credit unions fall into the trap of creating extra, unnecessary steps for members to take in the pursuit of auto loans. Get ahead of your competition by making it easy for members to respond! A great way to do this would be to post a URL in the members' ePresentment documents that will drive members to a page where they can fill out a quick form in order to be contacted by one of your loan officers.

Communicate Risk Mitigation with Credit-Impaired Members
Mitigating risk, especially when lending to credit-impaired members, is of utmost importance to credit unions. Ensure your institution is covered by insurance that helps protect collateral or loan repayment, and then build that cost into those specific loan rates. In order to effectively communicate this with your members without causing uproar, utilize member documents to prominently communicate the increase in loan rates- and the reasoning behind said increase. Your members will appreciate the communication and will feel good knowing that you are working with them to better their overall financial standings.

Partner Up
Your core focus is your members, so effectively communicating with them on every level, especially on member-facing documents, is of utmost importance. Partnering with a document outsourcing company that can design, produce and deliver business-critical content on any platform is critical to portfolio growth. 

In Conclusion
Member-facing documents are the perfect delivery method for your auto loan portfolio initiatives. By personalizing messaging, alleviating the customer response cycle, mitigating risk, and choosing a document outsourcing company that aligns with your strategic business goals, your credit union will be well on its way to seeing an expanded portfolio.