2021, much like 2020, was a robust year for mortgage lending with a continued strong pipeline of new home purchases and refinances. The general consensus seems to be this trend will continue into 2022, with a decline later in the year if the expected rate increases actually occur.
The end of each year is most special to us as we take time to reflect upon the many blessings for which we can give thanks. Our credit union and bank clients are some of these—especially because of their like-minded attitudes of gratitude for their own members and customers.
As the foreclosure moratorium initiated by the CARES Act during the pandemic comes to an end, tens of thousands of distressed home buyers are starting to come out of forbearance agreements which suspended monthly mortgage payments for a year or more for many borrowers. It’s important to note that forbearance agreements do not waive payments, but they must be paid back with interest according to the terms provided by the lender. This will inevitably lead to a significant increase in foreclosed and bank-owned properties in the next year and beyond. Does your financial institution have the proper REO insurance policy in place to weather the storm?
Many lenders I have connected with in the past three years have heard of blanket insurance coverages for their collateralized loan portfolios. However, CPI has become the industry standard for tracking and force placing insurance on auto loans, and that has come to the detriment to lenders, members, and borrowers. This article is the second in a series of two that discusses some of the most common objections to VSI that I hear from financial institutions.
As I have met with lenders over the past three years, many have heard of blanket insurance coverages. Oftentimes, blanket insurance comes with an understanding that a blanket policy carries more “risk” than a CPI policy. CPI has become the industry standard for tracking and force placing insurance on auto loans, and that has come at the detriment to lenders, members, and borrowers. Almost daily, I hear lenders say, “there has to be another way,” but when we talk about blanket insurance, there is a negative aura around it, and it often comes with the same initial objections.