Introduction:
Lenders Cooperative, a trusted provider of credit underwriting services, collaborated with a De Novo Bank in Tennessee to offer cost-effective and efficient underwriting support. In this case study, we highlight our successful partnership, where the bank engaged us in a retainer capacity to handle deal grooming and underwriting overflow. Our flexible retainer arrangement provided significant cost savings, enabling the bank to access expert underwriting services at a rate 50% lower than the market rate for a full-time underwriter.
Background:
De Novo banks often face resource constraints and budgetary limitations during their early stages of operation. Hiring a full-time underwriter may prove financially burdensome, while outsourcing underwriting services on a case-by-case basis lacks consistency and may incur higher costs. Lenders Cooperative recognized the need for a tailored solution that offers reliable underwriting support while ensuring affordability.
Challenge:
The De Novo Bank in Tennessee faced the following challenges in managing their underwriting needs:
- Limited Resources: As a newly established bank, the institution had limited resources and a need for cost-effective solutions to manage their underwriting workload.
- Deal Grooming and Overflow: The bank required additional support for deal grooming and handling underwriting overflow during peak periods or when internal resources were insufficient to meet demand.
Solution:
Understanding the bank's challenges, Lenders Cooperative proposed a flexible and cost-effective underwriting retainer solution. The key components of our solution included:
- Retainer Capacity: Lenders Cooperative served the bank in a retainer capacity, offering a monthly rate instead of a per-unit arrangement. This ensured consistent access to our underwriting services, allowing the bank to allocate tasks as needed while maintaining cost control.
- Deal Grooming Assistance: Our experienced underwriters worked closely with the bank's team to groom deals, ensuring that the loan applications were complete, accurate, and aligned with the bank's lending criteria. We provided valuable insights and recommendations to optimize deal structures and mitigate potential risks.
- Underwriting Overflow Support: During peak periods or when the bank faced a surge in underwriting requirements, we seamlessly handled the overflow tasks. Our team of skilled underwriters analyzed financials, assessed creditworthiness, and prepared comprehensive underwriting reports, ensuring high-quality results.
Implementation:
The implementation of Lenders Cooperative's underwriting retainer support involved the following steps:
- Needs Assessment: We conducted a thorough needs assessment in collaboration with the bank, understanding their specific underwriting requirements, workload patterns, and resource limitations.
- Retainer Agreement: Based on the assessment, we established a retainer agreement that outlined the scope of services, monthly rates, and terms of engagement. This provided the bank with flexibility and cost predictability.
- Workflow Integration: Lenders Cooperative seamlessly integrated with the bank's underwriting processes and systems. We collaborated closely with the bank's team, ensuring smooth information sharing, clear communication, and efficient task allocation.
- Timely Delivery and Reporting: Our underwriters delivered timely and accurate underwriting reports, meeting the bank's deadlines and requirements. We provided regular progress updates and comprehensive reports, ensuring transparency and effective communication throughout the engagement.
Results & Benefits:
- Cost Savings: By engaging Lenders Cooperative in a retainer capacity, the bank achieved substantial cost savings. Our monthly rate structure, priced at 50% less than the market rate for a full-time underwriter, offered an affordable solution that aligned with the bank's budgetary constraints.
- Flexible Access to Expertise: The bank gained flexible access to our expert underwriting services as needed. They were able to leverage our team of skilled underwriters without the financial commitment of hiring a full-time underwriter. This allowed the bank to allocate resources efficiently and scale their underwriting capacity based on demand.
- Consistent Quality and Timely Delivery: Lenders Cooperative maintained a high standard of underwriting quality, ensuring accurate assessments and comprehensive reports. Our team adhered to the bank's guidelines and lending criteria, providing consistent and reliable results. Timely delivery of underwriting reports allowed the bank to make informed decisions promptly, expediting their loan approval processes.
- Expert Guidance and Insights: Our experienced underwriters brought valuable industry knowledge and expertise to the table. They provided the bank with insightful recommendations, helping to optimize deal structures, mitigate risks, and make informed lending decisions. This partnership facilitated knowledge transfer and enhanced the bank's underwriting capabilities.
- Enhanced Efficiency and Workload Management: By engaging Lenders Cooperative in a retainer capacity, the bank achieved improved efficiency and workload management. They could offload deal grooming and underwriting overflow tasks to our team, ensuring timely completion of underwriting requirements without straining their internal resources. This allowed the bank to focus on core operations and strategic initiatives.
- Scalability and Adaptability: Lenders Cooperative's underwriting retainer solution offered scalability and adaptability to the bank's evolving needs. As the bank's underwriting requirements fluctuated, they could easily adjust the level of support they received from Lenders Cooperative, ensuring a flexible and tailored solution.
- Strengthened Risk Management: Our comprehensive underwriting approach helped the bank mitigate risks associated with lending decisions. By leveraging our independent assessment and expertise, the bank gained additional insights into creditworthiness, risk factors, and deal structures. This enhanced risk management practices, reducing the potential for non-performing loans and improving the overall loan portfolio quality.
- Focus on Core Competencies: By partnering with Lenders Cooperative, the bank could concentrate on its core competencies, such as relationship building, customer service, and business growth initiatives. They could trust our team to handle their underwriting needs effectively, allowing them to allocate their resources strategically and focus on key areas of their business.
Conclusion:
Lenders Cooperative's underwriting retainer support proved to be a valuable solution for the De Novo Bank in Tennessee. By engaging us in a retainer capacity, the bank accessed cost-effective underwriting services while maintaining consistent quality, timely delivery, and expert guidance. This partnership resulted in significant cost savings, enhanced efficiency, improved risk management, and scalability to meet fluctuating underwriting demands. By leveraging our expertise, the bank could allocate resources strategically and focus on their core competencies, positioning themselves for success in a competitive market.
To explore how Lenders Cooperative's credit underwriting services can provide cost-effective solutions and expert support for your bank's underwriting needs, visit our Credit Underwriting Services page https://www.lenderscooperative.com/credit-underwriting/.