LenderLive Network Inc. has announced that it has developed a comprehensive suite of services and product offerings for banks and credit unions that are re-entering or expanding their home equity lending. LenderLive expects that the demand for home equity products will continue to increase as home prices strengthen and low first mortgage rates make refinancing less attractive for millions of home owners. But at the same time, the rules for home equity lending have become more complex and the process for underwriting these loans has gotten more expensive, the company said.
The new LenderLive 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, which has historically been the industry leader in second mortgage documents.
►Private-label servicing of closed-end second liens.
►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,” said Rick Seehausen, chief executive officer of LenderLive. “More than 20 million homeowners now have first mortgage rates below 4.5 percent, 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 added: “Some of the most challenging new rules in first mortgage lending, such as the qualified mortgage (QM) and ability to repay (ATR) requirements, now apply to closed-end second mortgages (but not HELOCs): 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.”
“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.”