Sponsored Content from WFG: Are You Capitalizing on the Home Equity Lending Storm?

2022 has seen mortgage interest rates rise to a 14-year high of more than 6 percent as of September and mortgage application volumes drop to their lowest levels in 22 years. With declining affordability, home sales have plummeted and, according to the National Association of REALTORS (NAR), median sales prices have dropped for more than six consecutive months as well.

It’s not all doom and gloom, though. While record-breaking appreciation may have peaked, the majority of U.S. homeowners are solidly in an equity-rich position.

According to Black Knight, the average U.S. homeowner had $216,900 in tappable equity at the end of Q2 – meaning equity in excess of a 20 percent loan-to-value buffer. This figure was up $43,400 or 25 percent from the same time last year, for a record high of $11.5 trillion in tappable equity nationally. Black Knight further detailed that 73 percent of this tappable equity is held by borrowers with first-lien interest rates below 4 percent and 50 percent by borrowers with rates below 3.5 percent, respectively.

Not surprisingly, homeowners are leaving their first liens in place and opting for second-lien home equity products to tap available equity. Black Knight’s HELOC data confirms this, reporting home equity lending volume at its highest levels in 12 years.

Mortgage lenders are aggressively pivoting, ramping up their home equity lending capabilities and actively pursuing solutions to ensure they are competitive in this hot home equity lending environment. 

What makes a great home equity lending solutions partner?

Many home equity lending service providers claim to be experts in this segment; but, in practice, few have the proven track record, technology resources, breadth and depth of services, and market expertise to back it up.

Since WFG’s founding in 2010, the company’s Lender Services division has provided the nation’s lenders with innovative home equity lending solutions, closing more than half a million home equity loans to date. The company’s home equity lending clients include top ranking national lenders, community banks, and credit unions.

WFG Lender Services Senior Vice President Dan Bailey, who has worked in the home equity lending space for more than two decades, had this to say about what makes a service partner: “When I started in this business, we were closing more than 15,000 home equity transactions a month. These transactions are incredibly time-sensitive, with borrowers looking to access money quickly to fund home repairs, improvements, and other immediate expenses. The revenue profile for home equity transactions is very different as well, with lenders picking up most or all of the origination costs. For this reason, it’s imperative for service providers to deliver an accurate, high-quality product, and to do so very quickly and at a price that makes sense for our lender customers,” Bailey said.

WFG Lender Services has served the home equity lending market for more than a decade, providing end-to-end home equity solutions since Day One (see Figures 1 and 2). Also, because lender needs vary greatly in this space, WFG made it a priority to adapt and customize its offerings and programs based upon the unique needs of its lender clients. This makes the company a very versatile partner. Even more, WFG also delivers top-quality products, with an accuracy rate that is consistently 98 percent and above.

Figure 1

Figure 2

“We know no two lenders are alike. We want to be there to support our clients’ initiatives and strategies and provide them with a competitive advantage. We partner with our customers to help them execute on that strategy and do it better than their competitors to ensure their success,” Bailey said.

From an informational perspective, WFG Lender Services can provide all of the data and services lenders need to origination home equity loans, from origination through closing, post-closing and recording. With one-touch ordering through the company’s proprietary Valutrust™ technology platform, WFG is able to deliver this information in record time, enabling its home equity lending customers to make rapid, well-informed lending decisions.

“We literally do it all,” Bailey said. “We can provide our home equity lending clients with immediate access to everything they need. From pricing data to order status information, standard title, informational reports, and warranted products; legal and vesting reports, third-party data sources and verification services, property condition reports, AVMs and merged AVMS; flood hazard status information, and more. All of our products and services are available through our proprietary Valutrust® technology platform, which is integrated with the leading LOS systems. From a flexibility perspective, we can provide this data via information or data exchange, XML file, or compile and deliver it in a customized report designed to each lender’s unique specifications.”

In addition to providing a full range of home equity lending solutions, WFG Lender Services also provides an exceptional experience for consumers. WFG collects consumer review data for all transactions, participating in the Net Promoter Scoring program. Since the program’s inception several years ago, WFG’s Lender Services division has consistently scored 70 or above on the NPS rating scale, which NPS creator Bain & Company classified as a “world-class” rating. In August, WFG Lender Services rated an impressive 90, placing it in the ranks of the world’s best companies (see Figure 3). Not only does WFG participate in NPS scoring, the company also publishes its monthly and annual scores publicly and shares review data directly with its lender clients.

Figure 3

“There are always better ways to do things, and we work together with our lender partners to create and customize solutions that enable them to achieve peak operational efficiency while providing an exceptional experience for their customers. If they’re successful, we’re successful. It’s a win-win,” Bailey said.

For more information on WFG Lender Services’ Home Equity Lending Solutions, watch Dan Bailey’s MBA NOW video here, or visit https://wfgls.com/products-and-services/home-equity-services/.

(Sponsored content includes material submitted independently of the Mortgage Bankers Association and MBA NewsLink and does not connote an MBA endorsement of a specific company, product or service. For more information about sponsored content opportunities, contact Bill Farmakis at bill@jlfarmakis.com or 203/834-8832.)