May 2023 Newsletter

Upcoming Industry Events

May 10-12

Auto Finance Summit East - Nashville, TN

May 10-12

The WI CUL Convention & Expo - Wisconsin Dells, WI

May 16-17

LSCI's Branch Manager Workshop - Online

May 16-19

Trellance Annual Conference - Fort Lauderdale, FL

May 17-19

TN CUL Annual Convention & Expo - Gatlinburg, TN

May 24-26

VA CUL IGNITE Annual Meeting - Williamsburg, VA

May 27-31

NCUMA Annual Spring Conference - Amelia Island, FL

Industry News

The Repo Man Returns as More Americans Fall Behind on Car Payments

Pandemic relief measures for consumers meant repossessions largely dried up. Now repo companies are struggling to find enough workers to meet the requests as more Americans are struggling to pay their bills. Even with the risk the borrower might not be able to make payments, lenders are still eager to make loans as they can be sliced up into bonds and sold to investment firms, hedge funds, and other investors. According to calculations by ratings agencies, investors in the safest parts of today’s subprime auto bonds would still get their money back with interest even if more than three-quarters of the borrowers defaulted on their loans, assuming repossessed vehicles can be sold at auction for a modest share of their original prices.

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www.bloomberg.com

New Fee Structure on May 1 Will Make Mortgages Cheaper for Some and Pricier for Others

Fees are dropping for some borrowers making lower down payments, while rising for those putting more down. Beginning May 1, borrowers getting a conventional mortgage backed by Fannie Mae for Freddie Mac will be subject to the new pricing structure that depends on your credit score and how much you put down. Government backed loans (Like FHA mortgages), jumbo loans, and other non conforming loans aren't impacted.

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businessinsider.com

Raving Fan Review of the Month

"The Claims department communicates very well, is quick to reply, and provides a seamless process!"

US Community Credit Union

See what other Raving Fans are saying about ISI!

Data/Industry Trends

More People Are Falling Behind on Their Loans as We Move Into Life After the Pandemic

Car Breakdowns Are Making More People Fall Behind on Their Loans

Americans are already having a hard time finding a car they can afford after the rapid increase in car prices over the past few years. The cost to maintain or fix a car is also rising and consumers are less likely to keep paying on their loans if they also have steep bills to keep the cars on the road.

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On the Heels of the Pandemic, Borrowers With Low Credit Are Falling Behind on Car Loans

Subprime consumers are getting hit hard through inflation, the end of pandemic stimulus checks, and rising interest rates.

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The Cost of Owning a Car Keeps Rising

Auto insurance costs increased 14% in 2022, with the average car owner now paying around $2,000 a year for full coverage. Lower-income households are feeling the brunt of this as rates are often higher for owners with lower credit scores, less education, and living in urban areas.

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May Holidays, Fun Facts, and Folklore!

Celebrate the gorgeous month of May! The Sun is warming, the birds are chirping, the flowers are blooming, and the garden is growing. Find out what fun days May has to offer!

Everything you need to know about May

almanac.com

The Borrowers Ability to Pay

You calculate many factors in the borrower's ability to repay their loan, but are you including the cost of insurance in that calculation?

Some of the most common items included are monthly debt to income ratio, current debts, monthly payments, employment status, income, and credit history.

Your financial institution requires the borrower to maintain insurance throughout the entire term of the loan agreement, right?

If so, the borrower will be required to pay their insurance premium monthly to the insurance carrier they choose. The monthly cost the borrower pays is determined on the state, limits of coverage, type of vehicle, driving patterns, and more. However, common monthly premium rates can range from $100 to $200.

Best Practice, calculate an average monthly premium rate of $150-$200 in the borrower's ability to pay primary insurance!

We would be privileged to discuss further, contact us at management@isicpi.com.

Connect with Us:

Contact Info:

Phone: 800-749-5440

Email: management@isicpi.com

Website: insurancesystemsincorporated.com

ISI is an administrator of Collateral Protection Insurance (CPI) and Blanket Lenders Single Interest (BLSI) for financial institutions. We provide insurance, lending, and marketing products to the financial institution marketplace. Our mission is to deliver the best products and services in the industry through responsive service, comprehensive coverage, and advanced technology. We combine the lender's vision and our proven plan to create a portfolio that matches the lender's needs for a successful program and partnership.