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According to document volume data frommortgage document preparation vendor International Document Services Inc. (IDS), home equity lines of credit (HELOCs) have increased significantly amongst IDS customers in 2014. Beginning in Q1 2014 through Q3, IDS customers have already drawn more HELOC loan docs than they did in all of 2013. If current totals hold steady, 2014 HELOC loan doc draws could exceed those of 2013 by nearly 65 percent.
This trend mirrors that of the mortgage market as a whole. In his blog, industry analyst Rob Chrisman, pointed out that HELOCs were already up eight percent in Q1 of this year, totaling just around $13 billion. In addition, an Aug. 31 article in the Los Angeles Times stated that homeowners have opened $120 billion in new home equity credit lines since August 2013, representing a 27 percent increase in volume. The article attributes this increase to the rise in home prices throughout much of the country.
“Rising home prices have certainly encouraged borrowers to tap into their homes’ equity,” said IDS Executive Vice President Mark Mackey. “Because so many people were able to take advantage of the relatively low interest rates over the past few years, they are now highly incentivized to stay in and improve their existing home.”
Other loan types, however, seem to be holding steady. Conventional and FHA loan doc draws increased almost five percent over 2013 volumes during the same period, and both VA and USDA/Rural loan doc draws are up around 10 and 17 percent, respectively.
“During a time of declining volumes industry-wide, IDS has seen the exact opposite,” Mackey said. “Our loan doc volumes continue to increase year over year, and that’s due in large part to steady requests from existing customers, as well as business from new customers. At IDS, we strive to make docs the least stressful part of the lending cycle, and we’re thrilled to be able to assist in our customers’ successes.”