6 Home Equity Lending Questions Lenders Should Answer Before Offering Home Equity Products

In some depositories, home equity is not part of the mortgage transaction. Instead, it is lumped in with other forms of consumer loans, both secured and unsecured, as these loans tend to be invested in asset-backed securities.

That’s a suboptimal situation, Boyle said.

Consumers are looking for a digital experience where they can help themselves and shop, but they also want all of their options, especially when it comes to their home, in one place. “They don’t want to have to go here for this and there for that,” Boyle said. “I think the bankers who are going to be successful in the future are going to reposition themselves to thinking about it from a consumer perspective rather than execution in the capital markets.”

Additionally, having a unified experience with mortgages and home equity is a competitive advantage for these lenders, especially when consumers are dealing with solicitations from other providers, Boyle noted.

This also includes having the right technology in place that allows the loan officer to have a full picture of the borrower as it relates to the mortgage and home equity.

“The bankers are already sitting there with a full set of information on that consumer and in many cases can just execute the options,” Boyle said. Those who market both products can use technology to tell customers, “Well, I know a lot about you because you do business with us; just let me check some of your information.”

Regardless of the product, lenders need to make this process easier for their customers. A disjointed process will impact lenders’ ability to complete the transaction for the consumer, especially as the customer is approached by other providers, Boyle said.

It’s the old adage that a consumer can walk into a lending institution and get a car loan — a depreciating asset as opposed to a house — “very, very simply,” Ferringer said. “And yet, regardless of the mortgage product, I don’t think we’re there yet for what consumers expect from this process.”

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