With rising interest rates and home prices, many homeowners plan to stay put. Enter the Home Equity Line of Credit (HELOC). Many homeowners are delaying the sale of their homes due to the current market conditions, and this is affecting your loan volume. However, homeowners are still interested in updating their living spaces, and more choose to enhance rather than replace. Enter the HELOC opportunity! But do you have HELOC loan servicing solutions that you are confident in using?
Unlike a first lien, a HELOC leverages the home’s equity as a source from which homeowners can borrow for any number of reasons, from home improvement projects and college tuition to paying down other lines of debt.
Your risks in offering HELOCs:
As is the case of any loan, but especially one as dynamic as a HELOC, there are ongoing challenges financial institutions will need to meet. For example, as homeowners engage in remodeling projects, it is normal for contractors and suppliers to attach liens to the property. LoanCare can provide life-of-loan lien monitoring. Timely awareness of other liens protects the equity supporting the line of credit you are providing.
Your loan customer’s credit position may also change during the life of the loan. Therefore among our loan servicing functions is monitoring the borrower’s credit to alert you if it has changed in a way that would affect their ability to pay back the line of credit you have provided. In addition, line of credit monitoring helps you avoid non-performing HELOCs in your loan portfolio.
Servicing a loan is more than collecting monthly payments.
A comprehensive mortgage loan servicing solution like LoanCare is responsible for many aspects of managing a loan, for example, administrative, compliance, and fiscal core functions, including:
- Loan administration: Customer service/call center, website, escrow, payment/payoff, and more.
- Default administration: Collections, loss mitigation, foreclosures, electronic default reporting, etc.
- Business administration: Quality control and quality assurance.
- Compliance: Federal, state, local, and investor regulations.
There’s also client relations, investor remittance/reporting, risk mitigation—the list goes on.
Why choose LoanCare?
Because we’ve been servicing mortgage loans and HELOCs for a long time, our experience and economies of scale help your bank or credit union offer HELOCs even if you are new to them.
Providing your customers with suitable HELOC loan servicing solutions is critical to successful lending. Since this type of product requires the consumer to take on more responsibility, it’s essential that they have access to reliable, easy-to-use services that can help them manage their new loan.
LoanCare has a comprehensive understanding of the unique nuances involved, such as knowing what’s required to appear on monthly statements, ensuring interest calculations are accurate, and setting up the HELOCs correctly when the loans are on-boarded.
Specifically, LoanCare can accommodate segmented, fully amortized and interest-only HELOCs. We provide interim servicing and other capabilities, including:
- Private label checkbooks for customers to access their draws
- Customized monthly statements
- Assistance with line of credit management
- Lien monitoring assistance
- Ability to service non-property secured lines of credit such as artwork, car, etc.
Our superior loan servicing programs work for you and your customers.
The quality service we provide and your customer’s experience with our online tools help retain your customer… your customers. A happy HELOC customer is much more likely to turn to you when it is time for a new home loan or another financial service. Your success is our success, and we work every day toward our common goals.
“Mortgage lenders are turning over rocks for cross-sell opportunities within their existing portfolios, and we expect home equity lending to grow remarkably in the next few years,” said Dave Worrall, President of LoanCare. “LoanCare’s proven capability to subservice open-ended home equity lines of credit allows our clients to confidently offer this important product to their customers.”