Cenlar Will Offer Servicing for Home Equity Lines of Credit
Cenlar FSB here, one of the nation's largest subservicers of residential mortgages, will add a new product to its arsenal later this year.
Cenlar is developing a platform for servicing home equity lines of credit in response to growth in this market. Previously, Cenlar's focus has been on residential mortgage loans and closed-end second liens.
But Dave Miller, business development director of Cenlar, told MSN recently that subservicing of HELOCs will enhance growth opportunities for the firm and allow it to service all of a client's residential loan products.
Cenlar has already kicked off its formal program to deliver a HELOC subservicing solution and plans to bring clients on board in the fourth quarter of this year. Mr. Miller said clients will be able to use the service on a private-label basis, so that consumers do not realize their loan is being serviced by a third party.
He said the rise in interest rates has increased demand for open-end credit products such as HELOCs as banks and other lenders look for ways to offset declining refinance activity.
In addition, many banks that might consider using a subservicer currently service first mortgages, seconds and HELOCs on one platform, and that leaves them asking what do they do with HELOCs if they outsource loan administration on first mortgages.
"This will allow us to deliver that functionality to them," Mr. Miller said. Cenlar has built a project management team with dedicated resources to design the program.
"It is not in any way competing for resources with our other business, and it ensures that the product will get the appropriate attention to deliver what we want," Mr. Miller said.
Cenlar plans to offer a broad range of HELOC features and benefits, including check and credit card draw options. The company has already started marketing the HELOC program and signing up clients for implementation later this year.
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