The past two years have been some of the busiest in the history of the mortgage industry. Record-low rates, combined with increasing home values, moved homeowners to take an astounding 1.2 trillion in cash-out refinances in 2021.1 Today, however, the market has changed. With rising rates and low inventory, borrowers are now looking for other ways to pull cash from their homes to fund current financial needs – including major expenses like financing home improvements, college tuition, or debt consolidation.
According to ATTOM’s first-quarter 2022 U.S. Home Equity & Underwater Report, nearly half of all U.S. mortgages are considered equity-rich, meaning they carry secured loans of 50% or less of the homes’ estimated market value.2 This equity-rich environment, combined with other economic factors, have created a significant opportunity for mortgage lenders in the home equity space.
How to capitalize on home equity lending in today’s mortgage landscape
In a recent conversation with Parvesh Sahi, SVP, Client and Business Development at ICE Mortgage Technology®, President and CEO of the Mortgage Bankers Association (MBA), Bob Broeksmit shared that preparing to originate more home equity loans and home equity lines of credit (HELOCs) can bridge the gap of fewer cash-out refinances in today’s purchase-driven market. Watch the video below to hear Bob’s perspective straight from the Experience 2022 stage.
According to a recent TransUnion report, we are already seeing a rise in these home equity lending products with HELOCs increasing 31% year-over-year in the fourth quarter of 2021 and home equity loans increasing 13%.3 To capitalize on these opportunities, lenders need to ensure that they are educating their borrowers about home equity products and what might be the best fit for their unique situation. Additionally, they need to have the right workflow in place to support home equity lending and deliver the digital experience that borrowers expect.
Your partner for increasing ROI in home equity lending
At ICE Mortgage Technology, we are committed to delivering fully configurable solutions that meet borrowers needs while increasing your home equity lending productivity and profitability – all from a single system of record. Encompass® by ICE Mortgage Technology is trusted by banks, credit unions, and traditional mortgage lenders to help simplify and automate every aspect of the home equity lending workflow - while ensuring quality, compliance and an exceptional borrower experience.
Ready to grow your loan volume by helping borrowers tap into their home equity? Sign up below to be among the first to see the new and improved Encompass home equity workflow in action.