Archive for Growth & Retention

| May 13, 2013
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Five Ways to Make a Credit Score Model Work for You

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Guest post written by Barrett Burns, President and CEO, VantageScore Solutions, LLC.

VantageScore Solutions, LLC is the NAFCU Services Preferred Partner for Credit Scoring.

Times have changed since a promise and handshake were all you needed to get a loan. Now credit scores speak to your character. Most credit unions primarily rely on credit scores to help make consumer lending decisions. Credit scoring models incorporate credit scores with other characteristics related to creditworthiness. In today’s market, there are dozens of different credit scoring models available, from generic models such as the VantageScore 3.0 model, to customized models that are generally expensive to build and maintain.

Even so, it’s a common misconception to think of credit scores as a commodity, or a “one-size-fits-all” risk management tool.  A credit score is the numerical representation of the likelihood that a consumer within a specific population will become 90 days or more past due on a debt obligation in a two-year timeframe. It’s important to remember that this propensity to default is assessed within the context of the population being scored. The most effective credit scoring models incorporate other relevant information, such as current economic factors, over a greater population. Choosing the right model for your credit union can help you in ways you might not expect, from saving time and expense to improving accuracy and applicant pools.

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Category: Growth & Retention, Management & Operations | Tags: , , ,
| May 9, 2013
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The 100-Years Refinance (exaggeration intended)

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Originally posted on CUInsight.com.

Guest post written by Nizar Hashlamon, EVP, Client Relations, Mortgage Cadence.

Mortgage Cadence, formerly Prime Alliance, is the NAFCU Services Preferred Partner for Credit Union Mortgage Solutions.

My colleagues and I talk frequently about the coming changes in mortgage lending. The 100-years refinance (exaggeration intended) cycle will end this year or next. In its place is likely to be the most sustained purchase-money market since the 1950s through the 1960s. There are signs of this already. One headline last week in Housingwire read ’75% of Americans would rather buy now than later’. No doubt they want to take full advantage of the lowest rates in history before home prices rise too much further.

You know this. Everyone knows this. Helping people finance home purchases for the next decade or so is some of the most rewarding work mortgage lenders will undertake during their careers. Many first-time homebuyers will get their homeownership start in the next few years. Our chances to work with them for a lifetime begin now.

There’s a potentially dark side to the coming market changes. Rates will rise. You know this, too. What you might not have thought much about, however, is how much they will rise or for how long, and more importantly, what will the impact be on your secondary marketing pipeline. Start with this fact: rates today are at their lowest point since 1941. Since 1941 rates trended upward until 1985 when the 10-year Treasury rate peaked above 14%. From that point rates began their downward trend, bringing us to where we are today, back to where we were 70 years ago. Read more

Category: Growth & Retention, Management & Operations | Tags: , ,
| May 6, 2013
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Why Aerating Wine Is Like Implementing Predictive Analytics

Guest post written by Kristin Locklear, wine enthusiast, avid fan of Sonoma, new believer in aerating, and Account Executive for Credit Unions at SAS, the world leader in predictive analytics. 

SAS is the NAFCU Services Preferred Partner for Business Intelligence, Predictive Analytics Software & Risk Assessment.

Sonoma. The backdrop for some of the nation’s most beautiful scenery and wine was also the backdrop for this year’s NAFCU CEOs and Senior Executives Conference.  And what a backdrop it was! With pristine rolling hills, deep green valleys, and row after row of immaculate vineyards, it was hard to not feel as if you had just stumbled upon pure heaven on earth.

As more than 120 of us gathered to discuss such topics as regulation and leadership, it was hard to suppress my excitement for the scheduled group activities at hand. On Day 2, several buses departed for the ever-so-popular wine tour. What was expected to be just a day sipping fine wines, turned into a day of unexpected education (coupled with a little wine-sipping of course).

One of the ideas my tour group seemed to get hung up on was aerating (or letting the wine “breath” to enhance flavors), and for my sake, I’m glad they did. As it turns out, many of us had been doing it all wrong! Our tour guide, Heather, was a wealth of knowledge on this subject matter. She enthusiastically walked us through our lesson on what makes for good aeration and why it is often a necessary step to enhance red wine. Read more

Category: Growth & Retention, Other Fun Stuff | Tags: , , ,
| April 23, 2013
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National Financial Literacy Month is a Chance to Start Good Habits

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Originally posted on CUInsight.com.

This article references a study done by Discover, the NAFCU Services Preferred Partner for Debit Card Programs and Debit Networks.

It’s no coincidence that National Financial Literacy Month falls in April, the height of tax season. It seems like there are some teachable moments to be found while scrutinizing every financial decision of the past year. Tax preparation reminds me of holiday get-togethers where the family examines every bad idea everyone has ever had. But doing your taxes shouldn’t be like judgment day at the Santos dinner table. By developing good financial habits, especially at a younger age, managing your money can be a breeze.

National Financial Literacy Month is recognized as an opportunity to promote good financial habits through savings, smart purchases, and long-term personal financial planning to meet one’s life goals. Sound familiar? This is what credit unions do every day, of every month. Credit unions have a long history of helping their members make effective financial choices by offering better service, low fees, and financial education. Tools such as CULookup.com, NAFCU Services’ credit union locator website, offer personal finance calculators covering topics such as home buying, saving, borrowing, retirement and auto financing (also available free of charge for NAFCU Members to use on their websites). The site also includes links to personal financial education resources.

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Category: Growth & Retention, Management & Operations | Tags: , , , ,
| April 3, 2013
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Credit Unions Calculate Your Member Share

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Originally posted on CUInsight.com

Guest post written by Dan Green, Mortgage Cadence, LLC.

Prime Alliance, the NAFCU Services Preferred Partner for Credit Union Mortgage Solutions is a Mortgage Cadence company.

Year-end 2012 credit union data was released in the last few weeks. That’s an awful lot like running up and down the streets yelling, “Hey, everyone, the new phone book is here.” But for data nerds generally and these mortgage data nerds specifically, it’s a highly anticipated event. Although trends are trackable intra-year and performance predictions are easy to make, this is when we find out what really happened.

2012 was an eventful mortgage lending year. Credit unions closed $124 billion in first mortgages, the highest amount recorded in the industry’s five-decade home finance history. While dollars lent are good, market share is better. It grew, too, to 7.09%, also the highest it has ever been. If you are keeping score like the two of us have for so many years, this is truly good news. Both dollars and share continue the upward trend that began in 2006.

There are many different ways to look at mortgage lending performance. Total dollars and share of the US market are two broad measures. They are simple to calculate and easy to obtain. The reality is, however, neither tell us much about individual credit union performance, and neither provide a means of judging lending achievement vis-a-vis other credit unions. We think there are four simple ways to do that, too.

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Category: Growth & Retention | Tags: , , ,
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