The Productive Days of Summer

Summer is typically known for relaxing on vacation – 

but it’s also a great time to gain a competitive advantage through location intelligence and data insights.

To gain that competitive edge, your summer strategic plan may consist of three (3) simple steps:

- Look for easy access to data;

- Ensure comprehensive data selection;

- Better understand your risk;

Look for easy access to data

When looking to access risk related data:

. Confirm if the data is available via web service to allow you to 

integrate information into your current platform such as the Purview

AVM data and perils related data

. Understand how to obtain the highest match rate between your database and data services to avoid ambiguous addressing through the use of a unique address identifier (UAID®)

Success Story

A recent collaborative project with a shared client resulted in a 30% increase to the match rate to over 80%

Lenders using DMTI Spatial’s™ Location Hub® platform can search the national Purview web service using the UAID which is assigned to every address for Canada with roof-top precision.

Ensure comprehensive data selection

Teranet has partnered together with DMTI Spatial  to provide complimentary capabilities to shared clients to provide them with a more comprehensive view of their data .

With over 15M addresses in Canada, having access to the most comprehensive risk-based information at the property level allows insurance and finance companies to generate new insights.

Better understand your risk

With this wealth of location-based information 

businesses can benefit in the following ways:

. Understand the risks associated with specific geographical areas and leverage that knowledge to fine-tune pricing

. Link disparate information for real-time decision making

. Enhance portfolio analysis across the entire book of business

Summary

Take advantage of the down-time that summer offers. Evaluate your current systems and workflows and explore solutions that provide comprehensive information to help you hit the ground running in the fall.

Learn how location intelligence can help your business by contacting DMTI Spatial or Teranet.

How to Identify When an Area is Headed in the Wrong Direction

When it comes to avoiding lending too richly on an asset that could lose value, identifying problem areas in real estate is a key aspect of risk management that large FIs continue to monitor and that smaller FIs and private lenders are catching onto.

Sometimes an area can present a problem and sometimes a particular property in an area can present a problem. There are many things that you can do to forecast the performance of assets in different areas.

·         On the macro level, many lenders turn to House Price Indices like the Teranet National Bank House Price Index to measure the rate of change of single-family home prices across Canada, on a monthly basis. This report is particularly handy for lenders who lend nationally.

·         For lenders who want to look at data provincially, the Ontario Mortgage Insight Report provides information on sales, mortgages and home equity in Ontario – by location and transaction. Lenders lending in Ontario may consider using both the Teranet National Bank House Price Index and the Ontario Mortgage Insight Report.

·         Drilling down to local levels and individual properties, you can use Automated Valuation Models and other searches to generate information about property types and sales in different neighbourhoods.

·         Don’t forget the news! Sign up for the Financial Post and other publications to receive daily updates on the status of the economy! Stories that talk about changes in a particular area that could present risk or opportunity are great for garnering insight.

·         Talk to your colleagues. Find out from colleagues that work in other FIs, even competing ones, what tools that they rely on.  

Yes – this blog started with a negative tone, focussing on watching the housing market to mitigate risk – but how about the upside? Hot neighbourhoods present opportunities to you and the very same trends that help you mitigate risk can help you identify when and where to shift the marketing budget and your sales efforts to target those areas that have a strong and healthy market.

There is a reason that these reports and tools exist and why lenders continue to use them. Committing to being more in the know makes you more agile and competitive. In the land of the rate war and a housing market that continues to appreciate - despite some economists’ predictions – any extra tool that you can deploy to compete is a win!

Hopefully we have helped bring you into the loop on some of the tools available to you as it relates to identifying when an area is going in the wrong direction. 

For more information about tools you can use to identify upsell opportunities and mitigate risk please visit lenders.purview.ca or call us at 1.855.787.8439.

Oh the Irony: Automated Valuation Models Used Most by Banks But Even More Useful to Private Lenders

How ironic: a tool that has typically been used most by many larger lenders is actually much more useful to private ones! After all, as a private lender, it tends to hurt a bit more each and every time you lose a deal – whether through losing it before it funds, or worse, after it has been funded and blows up.

Larger lenders have deeper pockets and tend to assess the performance of their portfolio as a whole, looking for trends. However, you may not be viewing your portfolio that way and more on a one-by-one basis – especially when dealing with much lesser volumes.

The more time and money you put back into your pocket by identifying problem deals earlier in the application stages and mitigating losses on deals that go into default, the better off you’ll be in the long term.

You have likely heard of AVMs - Automated Valuation Models - probably most often in the context of finding upsell opportunities, investigating deals and mitigating risk, but they have a lot of other uses. In this blog we will look at how you can use them at the application stage and also when a deal becomes a problem after it is already on the books.

Not clear on these? In a nutshell, an AVM or Automated Valuation Model is a report you can generate to evaluate what a property is worth.

At the application stage, you can use this to immediately determine if there is a discrepancy in the value of a property, either making it not worth ordering an appraisal or pursuing or identifying more equity and an opportunity to upsell your deal.

Once a deal has gone sideways - or you think one is about to - you can use an AVM to get a current estimate of what the property is reasonably worth, which will make a major difference on how and what enforcement remedies are the most sensible to deploy.

Some providers of AVM reports, Teranet’s Purview For Lenders for example, offer additional capabilities as well so that when you request an AVM you can also validate who is on title or any registered encumbrances.

So now you see why so many larger lenders have historically relied on AVMs - but also why these are so valuable to private lenders. And, this is a tool readily available to you – whether you are big or small! The positive impacts of implementing AVMs into your workflow can be felt most by smaller lenders where each and every deal means a lot!

Want to know about Automated Valuation Models and how they are beneficial to your daily strategies? Call Teranet today at 1.855.787.8439.

Coaching Your Brokers on Deal Packaging Best Practices

Lenders are famous for sending their business development managers out to make mortgage brokers and agents aware of current products and rate promotions. This is an important aspect of marketing to brokers that is essential for keeping yourself fresh in their minds so that they send you deals. Your BDM’s are a formidable road force and your direct contact with your brokers and agents in many instances, so why not make the most of them?

Inbound marketing is a newer method of marketing promotion that has seen real changes in marketing methodology. The very essence of inbound breaks marketing into four stages:

·         Attract – make your business known to a stranger

·         Convert – convert the stranger into a lead

·         Close – make your lead a customer

·         Delight – make your customer a promotor

Our BDMs do a great job attracting brokers and agents, making them a powerful source of business for your institution – but the key to delighting your brokers and making your brokers an extended arm of your sales force is happens when you are constantly providing them with something of value that builds your relationships.

Education is one of the best ways to give added value to your brokers and this can be delivered through the very people that are on the front lines, daily – your BDMs.

Look at deal packaging as an excellent example. One of the things that frustrates lender/broker relationships the most is too many deals that don’t close. Perhaps the broker thinks the lender misrepresented the types of deals they would do, or perhaps your challenge as the lender is bad deal packaging that led to things coming up through the underwriting process that railroaded the deal.

Empowering your BDMs to coach brokers and agents on the following works to strengthen relationships and avoid issues later on:

·         Tools they can use to vet the deals they are working on – let them know what tools you are using

·         How to package a tight deal

·         Things in the application that you recommend that they verify before submitting a deal

·         What fields within the mortgage application matter to you!

Whether it is deal packaging tips, or even tips that they can deploy to land new customers or upsell current deals, value ad education go a long way to develop these life long and very profitable relationships.

Relationships are about give and take - so make sure that you are giving something of value to those in your network. This is the best way to make the most of these connections.

For more tips on how to coach our brokers on deal packaging best practices, please call Teranet today at 1.855.787.8439. 

Arranging a Mortgage Discharge: How to Find Out Who a Private Mortgage Holder Is

As a lender, there are key points in time when validating information can help you uncover an issue with your deal that could prevent it from closing. The top 3 deal killers: undisclosed people on title who won’t sign, less property value than anticipated, and higher balances on registered encumbrances than anticipated.

The operational savings to a lender’s underwriting department when issues are identified with deals sooner are exponential. This is why having a look at the encumbrances registered on a property is a good step for a thorough underwriter.

With regard to encumbrances to the title of the property, these may sound familiar:

• A mortgage where the discharge amount is far higher than anticipated
• Undisclosed mortgages on title
• Undischarged mortgages

Private mortgages can be extra challenging because even if the name of the lender comes up when searching the property, how can you obtain their contact information? For example, if Home Trust has a mortgage registered on a home, you can look up their telephone number easily. However, if Jane Doe has a mortgage registered, that info may be less accessible.

The best steps that you can take to position yourself to contact a private lender and directly request a discharge statement are as follows:

1. Run a search in Purview For Lenders to see if any encumbrances are revealed
2. You can then use Teranet Express to request a Parcel Register.* This will give you the “Instrument Number” associated to each registered encumbrance.
3. Using the instrument number you can purchase an Instrument Image which will almost always reveal the name and contact information for the real estate lawyer who represents the private lender and who likely registered the mortgage.
4. From here you can proceed to request a discharge statement.

Having the broker require that their client sign a consent form for you to access information from 3^rd parties is also helpful. If a tax lien or other third party lien comes up, they will not provide you with information without the client’s consent.

It is always best to identify encumbrances and request your own discharge statements. Once a lawyer is engaged you are likely far down the priority ladder in the underwriting process and out of pocket expense may have occurred.

If you are working with a private lender, get the most information possible, at the very beginning, to avoid issues when it comes time to close. Purview For Lenders can help uncover encumbrances, thereby saving you time and money down the road. Call us today for more information: 1.855.787.8439.

*An official product of the Ontario government pursuant to provincial land registration statutes.