Why Outsource Your Property Risk Program?

I get asked this all the time:

“Why should I consider outsourcing my environmental and appraisal risk management to a third-party firm like yours? Wouldn’t it be less expensive and less risky to keep this process in-house?”

Actually, no.

Although it is tempting to use your own staff to conduct environmental assessments, appraisals, and reviews, the reality is that this approach can cause a lot of headaches and expense down the road. Here are six reasons why outsourcing your property risk program often makes sense, especially for small- to mid-sized banks and credit unions:

  1. Access to a dedicated risk management team – When you decide to outsource your environmental and property appraisal functions to an experienced firm, you gain entry to a team of knowledgeable, expert staff whose sole focus is property risk management. These folks aren’t splitting their time with loan bookings, managing the latest safety and soundness exam, or implementing credit card compliance disclosure changes. It’s like having an entire department of environmental and appraisal experts on staff.
  2. Expertise at your fingertips—Not only are these professionals experienced, but they are also trained experts who stay up to date with the latest regulatory changes and industry best practices. They work with other financial institutions like yours, meet directly with regulators, and attend ongoing training sessions focused on property risk management issues.
  3. Transfer of due diligence liability— This is critical. If you conduct all property due diligence in-house, your institution may be subject to liability for any missed steps, future environmental remediation, or poor appraisal practices. By using a professionally-certified, insured third-party consultant like ORMS, your risk of loss is reduced substantially. Plus, ORMS stays abreast of rules, regulations, and laws to ensure our clients’ programs are compliant with the latest, ever-changing regulatory and policy requirements.
  4. Lower costs—By outsourcing the property risk management function, you pay for only the services you need, when you need them. Why pay for the salaries, benefits, and training of full-time internal staff to handle your environmental due diligence and appraisal review tasks, when you only require part-time assistance? Additionally, we offer a staged fee structure — the ORMS Escalation program — that prevents duplicate charges when additional levels of due diligence are required.
  5. Continuous education— Respected risk management consultants provide their clients with more than they ask for, such as ongoing education and training focused on best practices and evolving regulation. At ORMS, we offer your staff and management continuous education on important industry topics in a variety of formats including face-to-face meetings and webinars.
  6. Latest technology—Staffing isn’t the only expense you need to be concerned with. Implementing the newest technology to support an in-house risk management program can be cost-prohibitive. At ORMS, we utilize the latest software — including a state-of-the-art web platform — to manage our clients’ due diligence programs and ensure compliance with regulatory requirements.

Beyond these compelling advantages, partnering with a trusted firm like ORMS for your bank’s property risk management program can reveal some unexpected benefits:

“Recently, we forgot to submit an environmental review order for a pending loan closing,” says Raymond T. Glanville, III, VP/Credit Administration Officer at The First National Bank of Elmer. “By the time my team discovered the error, two weeks had passed, and we were in jeopardy of not meeting the closing deadline. But with just one phone call to ORMS I had the review in my hands by the end of the workday.

“This example is typical of the great service we always receive from ORMS. The ORMS team responds to emails and phone calls quickly, and always delivers on its promises.”

Isn’t it time to consider outsourcing your risk management program?


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