The Coal to Coast Building Society - Case Study Example

Analytical Reporting: Coast to Coal Building Society Name Institution Date Executive Summary The coal to coast building society identified a number of problems that the members of the society were struggling with because of the decrease in the economic growth of the country. The decline in the country’s economic growth has led to numerous members of the society to lose the jobs as a result of forced closures of coal mines that were considered uneconomical. The decline in the economic situation of the country sipped into the members economic situation and they result was a struggle with their mortgage loans. The society found itself dealing both established members of the building society as well as new members that were victims of the slow down or down turn in the economic situation of the country. The economic down turn for the country created an increase in the demand forrefinancing services for the bank. The coal to coast building society was able to empathize with the financial situations of the established and new members of the society and developed a new strategy that was intended to help the members cope better with the current economic situation and without the fear of losing their homes. The new strategy involved creating new departments that will have experts at each stage of the loan process who will manage the various stages. There were five departments that were established and these stages included; the application department, the processing department, the closing department, a department that will handle the new accounts for the society as well as a department that will handle the arrangements in the loan repayment. The new system of loan processing was established to increase the efficiency of the services provided by the building society as well as maintain asset security for the bank. Table of Contents Executive Summary 2 Table of Contents 3 Summary of the New System of Loan Processing 4 Summary of the Concerns of the Customers 6 Problems Identified with the New System 8 Recommendations 9 New Strategy 10 Conclusion 10 List of References 12 Summary of the New System of Loan Processing The new loan processing system has new departments created to improve the society’s efficiency as well as maintain asset security. The use of experts to manage each stage of the loan process will guarantee the increased efficiency and asset security. The new departments created by the society include the department of loan application, a department that will process the loans, a closing department, new account opening department as well as a loan repayment department among others. The loan application department involves the filling of application forms by the customers for a loan agent. The bank uses loan agents that give the customers the application forms to fill and in addition the loan agent explains or gives more information on the loans and refinancing options by the bank as well as performs a number of calculations to help determine whether the customer is qualified for the loan or refinancing option being applied for. After performing the calculations and determining that the customer does qualify for the loan the customer is given the loan application forms to fill in as well as sign them. Then the customer goes home to wait for a notification from the bank with regards to the loan. However, if the customer does not qualify for the loan he or she does not sign the papers involved in the loan application process (Cortesi, 2003). The second department created is the loan processing department which is managed by a loan processor. At this stage or department the loan processor who is the department head requests for a credit check for the applicant. He or she also verifies if the customer has other mortgage plans, appraises the properties that the customer has as well as his or her employment situation. This verification of the customer’s employment, property as well as other loans is to make sure that there are no problems for the loan processing process. However, if any problems are encountered the customer will be requested to explain his or her situation in writing or the loan processor will seek the advice of the loan agent. If the explanations given by the client are satisfactory the coal tocoast building society will then go ahead and process the loan given just as if the loan agent can assure the bank that everything will be fine and then advise them to just process the loan for the customer (Cortesi, 2003). The loan closing department is the department that receives the approval form from the loan processor sends a copy to the customer and thereafter calls a closing agent that will schedule a closing date where loan rate will be determined as well as the closing date for the customer. The role of the closing agent is to get the name of the customer’s lawyer who will in turn forward the loan package. The lawyer of the customer will then conduct an inspection of the house or property to be bought, also conduct a survey, a title search, an insurance search as well as prepare the necessary mortgage papers. The closing agent and the lawyer then meet and discuss the fees, payment schedules as well as the amounts to be paid with regards to the mortgage (Cortesi, 2003). The other department established is the new account establishment department where the manager of the department gets a loan servicing specialist that will ensure that if there was any previous loan it is cleared before they can establish a new loan account. The final department established by the coal to coast building society is the loan payment department. The head of the department makes arrangements with the customer or his agent on the setup for paying the mortgage loan. The payment setup is established after the loan has been closed. The loan payment specialist issues payment books to the customer or his agent or can set up automatic withdrawal of the mortgage fees as well as calculating the amounts to be paid by the customer on a monthly basis in an effort to pay back the mortgage loan (Cortesi, 2003). Summary of the Concerns of the Customers Although the new system of processing loans and new refinancing strategies were established to help the members of the society during their tough financial times due to the down turn in the country’s economic status, there have been issues that have arisen which are of great concern to the customers. Some of the concerns of the customers are as follows; The new loan processing system is taking a longer period of time to pay out the loans to its customers compared to the previous system. The delay has been accredited to the increase in the number of department thus making the process even longer. Although the new system helps customers save time and money during the closing of the loan, the money saved in the closing process apparently gets used up by the monthly payments which have been increased compared to the previous system (Gabaixand Laibson, 2006). Other customers are worried about the amount of following up that takes place with regards to the mortgage loan. Some members have opted to have the loan payments deducted from their salaries through the check off system yet the bank still calls some of the members with claims that their monthly payments are overdue. This is making the customers quite edgy as they get confused on the way our systems are working (Gabaix & Laibson, 2006). Customers are also complaining about the amount of writing involved in cases of discrepancies in their loans. They opt for the bank to just make calls to themwhich will make the process even faster as paper work makes the process slower. Customers are also complaining of the number of appraisals being done on their property while there is no progress being achieved on their property. They regard the countless number of appraisals every year as a waste of time because the bank conducts the appraisals annually and yet there is no progress on the property. Some of the customers are not aware of who to call when they have issues they need to solve with regards to the mortgage loan. The coal to coast building society has many new departments that work on the file of the customer such that it becomes a challenge for the customers to keep in touch with who has the file and who will help him or her when issues arise in the loan processing. This has seen many customers repeat their problems to various personnel of the coal to coast building society and such issuemake the customers very edgy (Gabaix and Laibson, 2006). The period of time taken to process a loan is so long that clients have reported that their credit reports, appraisal reports as well as their building inspection expire on them, this forces the clients to pay for new credit reports, appraisal reports, as well as their building inspection. The clients are now demanding that the coal to coast building society should be the one to pay for the new reports and inspection permits as it the fault of the bank that the inspection is delayed. The clients are also complaining about the unreliability of the personnel at the coal to coast building society, this is because some clients have taken time of their busy schedules to deal with the loan process personally only to be disappointed by the managers at the bank. The managers either postpone the appointments or the loan process or even worse they are absent from their role us forcing the loan process to be postponed. Customers do not take kindly to such treatment as they perceive that as total disregard to their time and efforts (Gabaix & Laibson, 2006). Other customers have also complained about fears of being double charged in their mortgage payments because of the number of forms being sent to them even after they have already signed the same forms. The bank has sent many forms to their clients even after they have signed the same forms with regards to their mortgage payments. The customers fear that the bank will charge them monthly payments twice every month (Gabaix & Laibson, 2006). Problems Identified with the New System The new system was established to help the customers or the members of the building society, however there are issues that have been identified to be a challenge to both the bank and the customers as well. Some of these issues have solutions that we will look into as well. Some of these issues identified include; The lists of departments that have been created make the loan processing a bit longer which agitates the customers as it takes a long time for them to get access to the money for their mortgage. Other than the delay the increased number of departments makes it difficult for the customers to solve their issues on time. This is because when they make calls to handle issues or get advice from the coal to coast building society they are referred to various number of managers who in turn keep asking them the same questions, this means that they repeat their problems many times as their files keep moving from one manager to another. Another issue identified is that there is poor communication between managers as well as between the bank and its customers. The bank should be able to inform the customers who has their file and the problems raised by the customers should be informed to the whole organization instead of a manager keeping quiet bout such issues which have the customers agitated when they call only to have themselves repeat their problems to different managers they are transferred to (Geradi, Rosenand Willen, 2010). Although the coal to coast building society is using experts to deal with the various departments in the loan processing procedure, the loan specialists are ineffective if the customers cannot access them when they need them. The bank therefore faces a challenge of inefficiency from their league of experts. Most of the communication problems arising in the new system affect the customer operations of coal to coast building society. There are a number of operational challenges that have been addressed as well which require the attention of the bank (Geradi, Rosen & Willen, 2010). Recommendations Although the bank intends to help the customers by providing them with expert services, challenges have been identified and some of them can be solved and these include; inefficient loan specialists that are constantly not available to help customers with their loan issues should be given notice or replaced with more efficient loan specialists. To help solve customer related problems the bank should ensure that their customers have hotline numbers that will help them get the right personnel to help them solve their various problems. Operational problems can be solved by redesigning their strategy in the loan process. New Strategy The company could perform better with new strategies such as reducing the number of new departments that have been created in the bank; this can be achieved by integrating some of the new departments created such as the loan application and the loan processing departments as well as combining the loan closing department with the department that establishes new accounts. Given the down turn in the state of the economy that has seen many people losing their jobs, the bank will do well to revise their rates downwards. This will encourage more people to take up mortgage loans with the coal to coast building society and with the increase in the number of loans taken more monthly payments will be made thus more profits for the coal to coast building society. The bank should also improve the communication between managers and the communication between the bank and the customers whether established or new customers. This is so because when customers make complaints the bank should keep records that will help all managers keep in touch with the problems that the customers are facing. The bank managers should then make an effort to find out more about what the customers are going through and also conduct research to find out the effectiveness of the strategies they employ to conduct their order of business. These are just but a few strategies that the coal to coast building society could use to improve their operations as well as their profitability in the bank. Conclusion The coal to coast building society is concerned about what their customers are facing financially during this season of economic down turn for the country.They have come up with various strategies that are meant to help the members of the building society to face the financial constraints being faced during the tough economic times of the country. They have developed strategies that will ease the burden of mortgage loan and mortgage payments for the clients by increasing the number of departments that handle the mortgage departments by hiring loan specialists to manage each of the new departments created. These departments include; the loan application department, the loan processing department, the loan closing department, new account establishment department as well as the loan repayment department. The difficult financial times have caused an increase in the demand of refinancing options from banks and the coal to coast building society has put in efforts to meet their customers’ demands. Despite of their efforts challenges have been prevalent in the customer relations and operations management. However, some of these challenges have solutions to them whether in the long run or the short run. List of References Maliene, V 2010, Specialized Property Valuation: Multiple Criteria Decision Analysis, Journal of Retail and Leisure Property, vol. 9, no. 5, pp. 443-450. Maliene, V, Deveikis, S, Kristen, L & Malys, N 2010, Commercial Property Valuation: A Comparison of the Case Studies in UK and Lithuania, International Journal of Strategic Property Management, vol. 14, no. 1, pp. 35-48. Linns, M, P, E., Novaes, L, F & Legey, L, F 2005, Real Estate Appraisal: A Double Perspective Data Envelopment Analysis Approach, Annals of Operations Research, vol. 138, no. 1, pp. 76-96. Adair, A & Norman, H, 2005, The Reporting of Risk in Real Estate Appraisal Property Risk Scoring, Journal of Property Investment and Finance, vol. 23, no. 3, pp. 254-268. Cortesi, G, R 2003, Mastering Real Estate Principles, pp. 371. Pargourtzi, E, Assimakopoulos, V, Hartzichristos, T and French, N 2003, Real Estate Appraisal: A review of Valuation Methods, Journal of Property Investment and Finance, vol. 21, no. 4, pp. 383-401. Gabaix, X & Laibson, D 2006, Shrouded Attributes, Consumer Myopia and Information Suppression in Competitive Markets, Quarterly Journal of Economics, vol. 125, pp. 505-540. Geradi, K, Rosen, H & Willen, P 2010, The Impact of Deregulation and Financial Innovation on Consumers: The Case of Mortgage Market, Journal of Finance, vol. 65, pp. 333-360. Woodward, S. & Hall, R 2012, Diagnosing Consumer Confusion and Sub Optimal Shopping Effort: Theory and Mortgage Market Evidence, American Economic Review. Warnock, V. & Warnock, F 2008, Markets and Housing Finance, Journal of Housing Economics, vol. 17, pp. 239-251. Read More