Home equity loans

Borrowers gained an average of $34,300 in home equity since the third quarter of last year, but that's almost half the amount of growth recorded over the summer.

Lenders are focusing on these loans to drive new business as the refinancing market continues to decline in the face of higher interest rates.

While loan consolidation is a priority for many who consider home-equity products, a third of those with other debts aren't comfortable taking out a second lien on their homes.

In the face of a growing number in home-equity products, HECM endorsements dropped nationwide by over 43% on a monthly basis to its lowest point in more than two years.

Also, the percentage of loan-to-value ratios in all buckets above 50% shrunk between the first and second quarter, according to a new CoreLogic report on homeowner equity.

The software for lenders is a bright spot for the fintech, which is reeling from a difficult second quarter in which it recorded a heavy loss due to an assessment of its title business.

Both bank and nonbanks are starting in — or returning to — this segment as they look to make up for declining originations. But there are a few key issues to consider before taking on the new line of business.

Even with the cooling housing market, the percentage of equity-rich properties will keep increasing.

Several lenders have introduced loan offerings this year to tap into surging property values, as refinances plunge by more than 80%.

But knowledge of HELOCs and HECMs is higher among Gen Z and millennials than boomers.

New home equity conversion mortgage endorsements slowed in April, but remained almost 50% higher than the level from one year ago.

Delays in closing the deal after it was announced in August resulted in the parties' decision to remain separate, although they will still work together.

Alternative financing startup Hometap says it increased its investments in the segment by more than threefold over the past year.

The new asset investment funding will be used for the company’s transactions, unlike a December capital raise that is being used to support operations.

Bain Capital and American Family Ventures were among the investors in this funding round for the company, which has more than doubled its staff in the past 12 months.

The deal comes just days after Figure closed on a capital raise that valued it at $3.2 billion.

Offered through the company’s 11 chartered units in 12 states, the five-year fixed-rate installment loan is secured by the home and is available between $5,001 and $14,999.

The company’s 4Q originations were down from the same time in 2019 and the number of overall loans for 2020 marked a decline from the year before.