Ah, the New Year. It's a time to look at the previous year, learn from its mistakes, and move forward. On a personal level, you may have vowed to improve your health, appearance, or character. After all, isn't that what New Year's resolutions are all about? What about your business resolutions? There's no reason you can't vow to improve the health of your loan portfolio. This year, add loan risk management to your New Year's Resolution list.
Why Loan Risk Management?
Credit and loan risk management are more complex - and more regulated - than ever. Vowing to improve your loan risk management procedures is a must, and it makes good business sense. By improving loan risk management, you are taking a proactive approach that can reduce risk and increase profits.
For example, what if you could identify a loan that's in danger of default in time to turn that situation around? Instead of allowing the borrower to default on the loan, you could offer refinancing. Not only does this avoid revenue loss, it fosters borrower loyalty. Your proactive approach can keep borrowers in their homes, and keep your agency profitable. It's win-win.
Reaching out to at-risk borrowers requires insights and intelligence. For example, if you don't know that a loan is at risk, you can't possibly contact the borrower with an offer to help avoid a foreclosure or default. Conducting a loan portfolio analysis is key to identifying at-risk loans.
Making Loan Portfolio Analysis a Simple Matter
Just as you might invest in a gym membership to help you accomplish a health-related resolution, consider investing in loan risk management software to help you accomplish your business's financial health-related resolutions.
Loan risk management software makes it much easier to analyze a loan portfolio. The benefits of using loan risk management software include:
. Instant analysis - With loan risk management software, loan portfolio analysis becomes a snap. Let the software do the heavy lifting and generate reports that show you exactly which loans need your immediate and near-term attention.
. Rich visualizations - Data visualizations (such as bar charts, thermometers, and trend lines) allow you to understand loan data at a glance. For example, color-coded charts can show you which loans are the riskiest while custom radars and gauges can be included on reports based on thresholds that you set.
. Risk alerts - When thresholds are exceeded, loan risk management software can alert you. Thus, you'll never be caught off guard.
. Compliance - Behavioral models can be used to prioritize calls to high risk borrowers.
. Proactive loan risk management - With software, you can proactively manage your loan portfolio.
If you dread conducting a manual loan portfolio analysis, you'll appreciate being able to do so with software. Loan risk management software isn't just for running a report or two; it's for building a more profitable lending business, providing better customer service to borrowers, and complying with complex new regulations. It's a New Year, isn't it time to make sure your business is in the best shape possible?
Frank Shields is an expert in the mortgage and loan industry. He has helped clients manage their loan portfolio and he highly recommends LoanLogics loan risk management software. He has also collaborated with various finance companies as consultant for special projects. Feel free to connect with him over at Google+ for more information or questions.