How do you anticipate that the market will shift this year and how will that impact home equity lenders?
At the end of 2021, Black Knight released figures that showed there was $9.4 trillion in untapped equity in U.S. homes, which is roughly an average of $170,000 per household. With interest rates rising and home prices increasing, this will shift the market from the record-breaking refinance transactions over the last couple years to a home equity market allowing consumers to tap the equity that has built up in their homes.
How is ServiceLink uniquely positioned to manage the shift from refi to home equity?
That's a great question. When you look at ServiceLink, we've been in the home equity space for 30 years, and as we all know, the mortgage industry is very cyclical. As we just came off record volumes for refinances, our cyclical market is primed to move into home equity transactions. ServiceLink has separate teams that handle our first mortgage transactions versus home equity transactions. These specialized teams are ready for the increased volume that we've already seen so far in 2022 and anticipate continued growth throughout the year. We have a fully customizable product set to meet any lender’s risk requirements, and our system is able to scale and quickly adapt to growing capacity and customer needs.
Why should a lender consider choosing ServiceLink for home equity transactions?
We have an end-to-end solution, starting with valuations and continuing through title and closing. ServiceLink provides a wide suite of services across the mortgage lifecycle and has the experienced, trained staff to shift with the demands of the market. When the industry shifts from refinance to purchase or refinance to home equity, ServiceLink is able to quickly adjust to meet that demand and help lenders close more loans, faster. We have specialty products that really mesh well with the lender's appetite based on what they see from a credit risk perspective on home equity transactions. For valuations, we have simple products such as automated valuations (AVMs) and also have complex products that go all the way through a full in-house inspection. On the title side, we have both uninsured and insured products and a variety of specialized products and workflows to meet any lender’s needs. When you couple that with our people, processes, and our technologies, I think it gives us the biggest value to prospective clients.
How can home equity lenders incorporate eClosing into their technology stack?
A major challenge for lenders is determining how to implement remote online notarization (RON) across their entire organization with so many players involved. Even if the organization has a centralized processing unit, there are likely to be multiple vendors with multiple processes, and multiple underwriters. Creating a process that addresses the needs of every stakeholder — loan officers, underwriters, processors, closers, vendors and borrowers — can become an overwhelming task. I believe on the home equity side, it is a little bit simpler than on the first mortgage side, depending on a lender’s risk and compliance guidelines. For home equity, the footprint is bigger for RON closings for uninsured products since Underwriters are not involved. There is definitely a little bit more leeway than we've seen in the first mortgage space due to more stringent title insurance underwriter and Investor requirements. ServiceLink is here to help our home equity lenders understand the landscape and help them get to a full eSign process. ServiceLink offers to help lenders with the transition to eClosing with our array of signing products and capabilities. We have multiple options for both insured and uninsured title, and we can offer eClosings that still facilitate in-branch or face-to-face closings.