With demand for home equity products expected to increase, mortgage banking technology and services provider LenderLive Network Inc. has rolled out a new suite of services and product offerings for banks and credit unions re-entering home equity lending or expanding their current offerings.
LenderLive says the comprehensive suite of solutions takes into account that the rules for home equity lending have become more complex – and the process for underwriting these loans has become more expensive.
The new suite of home equity options includes private-label origination of both closed-end and home equity lines of credit, compliance and document management services through LenderLive's GuardianDoc's unit, and private-label servicing of closed-end second liens.
Importantly, the suite also offers nationwide settlement services and third-party vendor single point-of-contact (SPOC) oversight and product management with an integrated pricing calculator for all third-party vendor costs.
‘Current demographics and economic trends all favor the return of home equity lending,’ says Rick Seehausen, chief executive officer of LenderLive. ‘More than 20 million homeowners now have first mortgage rates below 4.5%, according to Corelogic. When these homeowners need more space for growing families or want to tap the equity in their homes, home improvement may be more attractive than buying bigger homes at higher interest rates, and home equity loans may be more advantageous than refinancing. These customers will expect a quick decision on their applications and a no-cost transaction which will create challenges for lenders.’
Seehausen points out that the Consumer Financial Protection Bureau's new qualified mortgage (QM) and ability to repay (ATR) requirements are "creating logistical and compliance concerns for banks that originate home equity products in both their consumer finance and mortgage operations."
‘Similarly, depending on the type of institution and where it is making these loans, there are different document, valuation, disclosure, recording and servicing requirements,’ he adds. ‘Our suite of private-label offerings is designed to let clients offer a full range of home equity products to their customers: knowing upfront exactly what their costs and customer experience will be.’