When a lender outsources their collateral risk, there are multiple ROI factors:
- Has the vendor considered all possible risk scenarios associated with each portfolio?
- Have they customized the policies to provide low- or no-cost risk transfer?
- What are the expenses associated with the delivery technology?
- What are my annual Vendor Management expenses?
Miniter helps our lenders maximize ROI by understanding the inherent risks embedded in each type of loan portfolio and then applying a proven, low-cost, compliant solution. A typical example is a HELOC portfolio:
Many lenders choose to transfer HELOC risk by tracking the borrower insurance on these portfolios. Tracking will cost the lender anywhere from $3 to $6 annually per loan. We disagree with this methodology and advocate using a blanket insurance policy on non-SFHA HELOC loans. This is because the frequency of loss is so low on a HELOC/2nd portfolio that blanket insurance is cost-effective. This will eliminate any forced placements and will reduce the annual cost to roughly $2.25 per loan — a better solution for both the borrower and the lender!