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Use Data To Maximize Limited Window Of Opportunity

Credit unions can use number crunching to identify mortgage and HELOC candidates.

During the past several months, the average 30-year conforming mortgage interest rate has remained below 4%. While the rate is not quite at the historic lows seen in late 2012 and early 2013, they are close. Many experts expect these low interest rates to continue through the second quarter of 2015 and then shift upwards during the remaining six months of the year. Recent statements by the Federal Reserve seem to support this theory.

That being the case, this particular moment in time represents a great opportunity for credit unions if they can position themselves to take advantage of the current market conditions. How does a forward-looking credit union find and market to members that can both benefit from and qualify for today’s low rates? As is so often the case in this industry, the key is to be armed with the very best data and information possible.

According to an analysis conducted by Black Knight Financial Services, there are more than 7 million borrowers who could still benefit from refinancing their mortgages. And, these borrowers are good candidates based upon today’s interest rates, as well as their current notes, credit scores, and loan-to-value (LTV) ratios. While obviously not all are credit union members, the truth is that many are they just don’t have their mortgages with the credit union.

In addition, approximately 28% of outstanding adjustable-rate mortgages will reset over the next two years, generating a market of some 365,000 borrowers who may be looking to refinance to a fixed-rate loan while rates are near historic lows. Add in the 640,000 active home equity lines of credit (HELOC) with draw periods ending in 2015 (and almost another 700,000 next year), resulting in monthly payments jumping an average of $254, and this potential refinance market further increases. Again, many of these homeowners are credit union members.

While these circumstances create an attractive target market, the challenge becomes one of identification and outreach, given the limited window of opportunity. Having access to the most robust data sources possible, along with the ability to slice and dice data, allows credit unions to effectively identify current members that could benefit from refinancing or home equity lending.

Leveraging Black Knight’s comprehensive public records and mortgage databases, a credit union can easily identify these new opportunities among its membership base. Information regarding current mortgages, interest rates, owner occupancy, and estimated LTV can identify members whose first mortgages may be with another institution, but who would be excellent candidates for refinancing with the credit union.

Used together, all of these varying and comprehensive data elements help paint a holistic picture of a member, as well as the particular products and services best suited to that member’s individual situation.

In addition, there are another 4.3 million borrowers for whom refinancing is less attractive having already secured low interest rate loans, but thanks to two and a half years of home price appreciation, they’re in a position to tap newfound equity. With Black Knight data, credit unions can easily identify members among their current first-mortgage portfolio that fall into this category and would therefore be eligible for a HELOC.

By combining Black Knight’s industry-leading loan-level information with its comprehensive U.S. property records database which includes information on more than 99% of U.S. properties and is the largest in the industry identifying potential customers transforms from a guessing game to an accurate science.

Used together, all of these varying and comprehensive data elements help paint a holistic picture of a member, as well as the particular products and services best suited to that member’s individual situation.

Credit unions that take full advantage of data’s potential can identify qualified business leads and create detailed prospect profiles within existing membership, based on almost any criteria the union chooses to define. In the process, they’ll be able to identify opportunities and, most importantly, to act while the window to do so is still open.

For more information on SiteXPro and how Black Knight’s industry-leading property, MLS and mortgage performance data can help you increase your knowledge of existing member base or generate more real estate loans, contact us at DataAnalyticsInfo@bkfs.comor visit our website at www.BlackKnightDNA.com.

By JannyChyr
Product Manager, Black Knight Financial Services Data Analytics

Janny Chyr is a Product Manager with the Data Analytics division of Black Knight Financial Services. Janny oversees SiteXPro.com, an innovative new platform that offers complete, accurate and reliable property and mortgage information from a single source.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
April 6, 2015

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