Home Equity Benchmark results

Molly Gregg

Description

Home Equity OverviewSeptember 12, 2005Jim LeathSenior Vice PresidentFidelity Office of the Enterprise3535 Piedmont Road, Suite 950 www.benchmarkinternational.comAtlanta, GA 30305 United States Telephone: [phone]Home Equity Overview• Strategy• Markets and Products• Service Delivery and Technology• Risk ManagementCopyright © 2005. BenchMark Consulting International, NA, Inc. 2All Rights Reserved. StrategyWhy fewer non HE products in CL portfolio?– Homeowners are encouraged to consider HE product– Non-equity secured CL products not proactively sold; sales staff areencouraged to sell one consumer lending product – the HE product, partially addressing the limited “shelf space” struggle– Sales incentive programs are designed to promote HE loans/lines– Unsecured personal LOCs are being replaced by HELOCsCopyright © 2005. BenchMark Consulting International, NA, Inc. 3All Rights Reserved. StrategyCustomer experience needs to be quick and easyCopyright © 2005. BenchMark Consulting International, NA, Inc. 4All Rights Reserved. StrategyCustomer experience needs to be quick and easy- Simplified underwriting policies/requirements- Balancing customer relationship with processesUse Automated YesUnderwriting?52%48%NoSource: 2004 CBA Home Equity StudyCopyright © 2005. BenchMark Consulting International, NA, Inc. 5All Rights Reserved. StrategyAverage Turnaround Time (Application Receipt ...

Informations

• Publié par: Naphug
• Nombre de lectures: 15
• Langue: English

Extrait

Jim Leath Senior Vice President Fidelity Office of the Enterprise

Home Equity Overview

September 12, 2005

3535 Piedmont Road, Suite 950 www.benchmarkinternational.com Atlanta, GA 30305 United States Telephone: [phone]

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Strategy

Home Equity Overview

Markets and Products

Service Delivery and Technology

Risk Management

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

2

Strategy

Why fewernonHE products in CL portfolio?

– Homeowners are encouraged to consider HE product

– Non-equity secured CL products not proactively sold; sales staff are encouraged to sell one consumer lending product – the HE product, partially addressing the limited “shelf space” struggle

– Sales incentive programs are designed to promote HE loans/lines

– Unsecured personal LOCs are being replaced by HELOCs

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

3

Strategy

Customer experience needs to be

quick and easy  

and   easy

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

4

Strategy

Customer experience needs to be quick and easy - Simplified underwriting policies/requirements - Balancing customer relationship with processes

Use Automated Underwriting?

52%

Source: 2004 CBA Home Equity Study

48%

Yes No

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

5

60%

40%

20%

26% 18%

Strategy

Average Turnaround Time (Application Receipt to Closing)

21% 18%

Overall Average = 17.5 Days

3%

21% 21% 16% 16% 11%

0% 10 Days or Less 11 - 15 Days 16 - 20 Days 21 - 25 Days > 25 Days

Source: 2004 CBA Home Equity Study 2000 2004

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

6

Strategy

Effective strategy balances “quick and easy” with risk. Some of the risks that the regulatory agencies are monitoring include: –Interest only features – “Low doc” or “No doc” of assets, employment, income –Higher Loan-to-Valueand Debt-to-Income ratios – Lower credit risk scores for HE Loans –Greater use of automated valuation models and other collateral evaluation tools – Increased loan broker or other third party generated transactions

Source: Credit Risk Management Guidance for Home Equity Lending 5/16/2005

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

7

Strategy

Cross-selling to existing customers:

– More success

– Depository and mortgage accounts are best prospects

– Target select customers for direct mailings, along with rate specials and branch campaigns

– Sales support and ongoing training for the branches

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

8

Strategy

More direct mail campaign success with existing bank customers vs. prospects

Direct Mail Campaign Booking Rate

3.0%

2.0%

1.0%

0.0%

1.6%

Customers

2004

Source: 2004 CBA Home Equity Study

0.5%

Prospects

Market Strategy #1 Existing customers #2 Prospects in market #3 Prospects out of market

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved. 9

Strategy

Existing HE penetration within the deposit customer base is 9%: % Deposit Customers with HE

80%

60%

40%

20% 0%

7%

Small Source: 2004 CBA Home Equity Study

4%

Medium

9%

Large

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Markets and Products

Heightened consumer demand for fixed-rate equity line products:

% Offering Fixed Rate Equity LINE Feature

Source: 2004 CBA Home Equity Study

56%

Yes

44%

No

Copyright © 2005. BenchMark Consulting International, NA, Inc. All Rights Reserved.

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