In late 2019, community lenders had no idea what kind of challenges they would face during the upcoming year. While many lenders set their budgets for upcoming years in the fourth quarter, it was impossible to predict the current environment that we would be in today. As the novel coronavirus swept through the news and the United States, financial institutions took (and continue to take) a vital role in maintaining the wellbeing of Americans.
If you are in the mortgage lending business, not only have you been dealing with all the issues related to the COVID-19 pandemic, but many of you have been dealing with record loan volumes as well. While purchases have been scattered about, borrowers looking to refinance during these historic low rates have been applying in droves. Fannie Mae recently announced they expected $1.5 trillion in refinances in 2020. This would represent a 51% increase from 2019.
As our country is still grappling with how the Coronavirus pandemic is shaping a new normal for society, many industries are recognizing that changes must be made to certain facets of their operations. This is certainly true within the world of financial institutions and lending in many different ways. Between dealing with the overwhelming number of applications from the Payment Protection Program and having to adjust lending operations with many working remotely the last thing a lender wants to hear now is that the Blanket VSI that protects their auto lending portfolio is being adjusted.
GAP coverage, also known as Guaranteed Asset Protection or Guaranteed Auto Protection has been available to consumers and lenders since the early 1990s. However, due to the current economic conditions its benefits to consumers and lenders have never been more crucial than it is now. There are many reasons for loan officers to consider making GAP a recommendation to their borrowers.
The community lender’s role as a trusted advisor during the mortgage application process is truly an important one. In many cases the lender can rely upon their expertise, however, there are times when it is prudent to rely on a trusted partner of their own to provide sound advice to their borrowers. One of these cases is finding the most affordable option for flood insurance.
The COVID-19 pandemic has uprooted our way of life. The impact of this contagious virus can be felt through all aspects of our daily living. The public health crisis is of the utmost importance right now, there is no disputing that fact. But as our medical and scientific communities continue to develop therapies, vaccines, and public health solutions to combat the virus going forward, there comes a time to reflect on how the pandemic is impacting different segments of our lives and our economy.