When it comes to the unexpected, it’s hard to feel proactive. Natural disasters are overwhelming, unexpected, and can change quickly. Service delays can be compounded as business operations stall, mail is delayed, and populations are evacuated. If unprepared, lenders face reputational risk at being unaccommodating or unresponsive in the face of an event, while also facing large collateral losses.
It’s hard to preemptively measure or anticipate collateral risk exposure due to severe weather or catastrophic events. Collateral and property losses are typically severe and concentrated to specific locations. Lenders remain liable for insurance coverage and claims jump significantly during these events . Additional challenges that emerge include adhering to federal regulations and staying abreast of state bulletins and guidelines, payments are often delayed due to evacuations by the consumer or consumer’s agent, and paying bills become low priority.
However, having a plan in place can make all the difference between responding effectively or simply reacting to a natural disaster.
continue reading »