Lenders rise to the demands of the home equity market by embracing new tools and modernized processes.
Despite the volatile state of the market throughout 2023, one thing remained consistent: home price growth. Rising prices boosted home equity accumulation, with total mortgage holder equity topping $16 trillion in mid-2023. That equity accumulation demonstrates the high demand for home equity loans and lines of credit is not slowing down anytime soon.
“High demand has lenders taking a fresh look at their home equity products and services,” says Barry Coffin, managing director, origination title and close, ServiceLink. “How can they create an exceptional borrower experience while reining in the costs of producing a loan? Technology and process innovations are key: Advances in title and close, flood and valuations are all reducing the time and cost of getting borrowers to the closing table.” “Lenders who share the mindset of the tech-savvy borrowers seeking loans and lines are poised to cash in on the current home equity boom,” explains Sandeepa Sasimohan, vice president, title automation, ServiceLink. “Product innovation is essential in this market, whether lenders are trying to gain or retain customers. Borrower demographics are leaning heavily toward the mobile-first generation, which expects technology to clarify and enhance their journey. Innovations can set lenders apart in this competitive environment.”
Navigating this market can be challenging, which is why you should know the six most important things to look for when choosing the right partner.
#1: Speed & efficiency: The latest technology, processes and products
When it comes to home equity transactions, efficiency is key. Borrowers expect speed and ease of the process. Lenders benefit from reducing their cycle times as well, as doing so results in lower costs and securing borrowers. When it comes to helping lenders meet their home equity application-to-close goals, streamlined settlement processes play a huge role.
“Your service partner should provide support that helps you shrink transaction turn times, whether you are working toward bringing your average close from 35 days down to 10, or from 10 days down to three to five,” Coffin says. “We do this at ServiceLink by applying advanced technology — digital title solutions, automated inspection and appraisal tools, consumer-facing scheduling apps and eClosing options — and working with you to optimize your internal workflows and processes.” In addition to providing a holistic home equity solution that includes a full spectrum of customizable title, closing, flood and valuation products, ServiceLink also offers Equity View, which provides lenders with all the information they need in a single report to originate a home equity loan, including:
- A property report built on title-grade plant and repository data that includes vesting information, a legal description, mortgage/deed of trust information, tax information and status of any involuntary liens of record.
- Automated valuation model (AVM) reports that simplify and expedite the valuations process by providing market value data, property details, satellite photos, etc.
- Flood zone determination materials that include a Life of Loan Flood Certificate, Notice to Borrower and aerial images to support the flood insurance assessment.
#2: Innovative instant title tech solutions
While instant title first gained traction for use in refinances, it also brings value to home equity transactions. Lenders who used instant title technology as refinances were surging benefited tremendously from receiving accelerated title information – and the same holds true for home equity. An instant title report makes the home equity process easier as it enables lenders to provide borrowers with a closing timeline at the very beginning of the home equity lending process, helping to ease the uncertainty often associated with a major financial decision like a home equity loan. It also reduces the overall origination cycle time, helping lenders meet their turn time goals. ServiceLink combines this efficiency with a commitment to quality and innovation. Backed by Fidelity National Financial, ServiceLink has access to robust, quality property data sources - nationwide. With our scale and cascade of title offerings, lenders can ensure their underwriting requirements are met whether that means legal and vesting, property reports or full instant title commitments. Lenders can easily transition between uninsured and insured based on underwriting.
#3: State-of-the-art closing options
Technology facilitates home equity closings as well, helping lenders create a differentiated customer experience that helps borrowers get to the closing table faster. These tools include:
EXOS® Close: a platform that enables the borrower to self-schedule their closing by gaining direct access to signing agents’ availability. This solution features consumer-facing digital scheduling technology with the potential to shave days off the application-to-close journey, enabling almost all users to select the first available day to close. It also helps reduce reschedules by nearly 100 percent. It offers a transparent experience with closing appointments confirmed within the first five minutes. Lenders receive notifications of key milestones and are able to stay on top of all parts in the closing process. If preferred, processors and closers can also schedule on behalf of the borrower.
Remote and hybrid signing options: Lenders equipped to accommodate requests for fully remote eClosing options — remote online notarization (RON), and in-person electronic notarization (IPEN) — and hybrid signings can not only provide borrowers with convenient alternatives to traditional in-person signings, but also streamline their processes and allow notaries to certify more documents in less time. Using IPEN or hybrid closings, lenders can experience the benefits of electronic notarization while still closing in-branch.
Notary quality is, of course, critical. Coffin recommends consolidating the signing experience under a single provider that can manage eSign and remote online notarizations, as well as traditional wet signs. “ServiceLink’s single signing solution combines an experienced, accessible network of real estate notaries and attorneys with EXOS Close technology, which enables the borrower to control the timing and format of their closing,” he says. “This process expedites scheduling the appointment, getting the documents back and receiving notification that the loan has closed — stages in the process that can take much longer and require much more effort when multiple providers are involved.”
#4: Reliable flood solutions
At a time when flood maps are constantly changing, technology helps ensure that lenders can quickly assess whether a home equity property requires flood insurance. ServiceLink Flood allows lenders to customize product based on their risk appetite and borrower needs. For example, QuickCheck technology provides an instant response informing lender and borrower whether the subject property is in or outside of a FEMA Special Flood Hazard Area (SFHA). For properties that require flood insurance, ServiceLink’s InstaQuote quickly researches insurance costs. Then the lender can obtain a Basic Flood Zone Determination and Life of Loan Flood Zone Determination. Another exclusive ServiceLink tool, CertMap® helps minimize borrower disputes by clearly illustrating why flood insurance may be required. CertMap incorporates high-resolution FEMA images, digital road layers, and full-color satellite and aerial images to disclose a property's proximity to the FEMA flood zone.
#5: Commitment to appraisal modernization
Bolstered by the support of Fannie Mae and Freddie Mac, appraisal modernization is sweeping the industry. Home equity borrowers and lenders alike are benefiting from new technology that runs the gamut from instant digital scheduling to automated inspections and valuations. On the lender side, ServiceLink offers valuations products ranging from desktop appraisals, AVMs and hybrid valuations to traditional full appraisals. The EXOS® platform helps streamline internal processes and workflows through technology that includes an automated quality control review process, which ensures appraisals are aligned with each lender’s unique underwriting requirements. ServiceLink’s dedicated home equity operations, customer service team and experienced national appraiser panel back this technology with human expertise.
On the consumer side, the EXOS® Valuations self-scheduling solution enables borrowers to save time and money by scheduling their inspections within minutes, or even seconds, when an appraisal is required. It also offers borrowers transparency by letting them know who will be inspecting their home and what type of vehicle they can expect them to arrive in.
#6: Home equity expertise
Succeeding in the home equity market requires having a knowledgeable, experienced, committed technology partner. ServiceLink is unrivaled in the mortgage industry providing innovative home equity technologies with expertise and insight. Our team’s knowledge of how to leverage technology to its fullest can help take the extra burden off lenders moving into the home equity space. By customizing solutions to meet your unique requirements, minimizing your exposure to operating and financial risk, and navigating situational complexities as they arise, our team is dedicated to getting you to the closing table faster. We can help you develop and implement high efficiency processes and create a customer experience that truly sets you apart from the competition.
Reach out to us today to see how ServiceLink can support your home equity efforts.
