Interest rate hikes and refinancing declines have highlighted the 2022 housing market, and lenders are working hard to respond to new borrower behaviors. In an interview with Barry Coffin, managing director of ServiceLink’s home equity title/close, on how lenders can take advantage of these developments by ramping up their home equity products; He said first, as a result of the drop in refinance transactions driven by higher rates, origination volume is rapidly decreasing. Second, property values continue to rise, providing homeowners with more liquid equity than in years. Finally, lenders can effortlessly shift resources from refinancing operations to home equity operations because of the combination of these two variables.
With the increase in home equity volume, lenders should strive to add the same digital solutions to their home equity offerings that they concentrated on introducing to their refinance business. Efficiency equals technology. Many lenders have not invested much in technology for their home equity processes. Their loan origination system is still based on legacy in-house technology, and their processes are inefficient. Investing in technology makes sense when considering efficiency to control product costs.
Lenders must work on efficiencies to shorten loan cycle times from a home equity standpoint. There are still some lenders who take 35, 40, and 45 days or more to settle a home equity loan. Lenders have been focusing on digitizing their procedures in recent years to reduce the time from application to closing. It would benefit lenders to know that these procedures work similarly for home equity title/close processes. To read more, click here.
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