TheMReport — News and strategies for the evolving mortgage marketplace.
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30 | M R EP O RT FEATURE doesn't really resemble how it looked before the global financial crisis of 2008. There are now rules about appraisal values that were not in place previously, and income requirements are much more stringent now as well. Meanwhile, home values have steadily in- creased even during the pan- demic, as people previously living in apartments and townhouses began looking for more space with single-family homes. Tapping into the Opportunity I n addition to increasing inves- tor appetites for home equity products, originating second-lien loans is getting easier. Lenders that specialize in home equity products have been investing in technology to streamline the process and make it easier and faster for homeowners to access cash in their homes. Automated valuation models (AVMs) can also be used to assess value on lower priced homes, which shortens the origination process even further. The reality is there are not many good second-lien players changing the market, but the ones that exist have an opportunity to take things further. Right now, smart home equity lenders are shoring up their investor part- nerships and making sure their products match the long-term investment profile of their capital partners. For originators, the bottom line is that the market is shift- ing, and to grow business, they'll need to sharpen their pencils and come up with an action plan for a higher rate environment. For most, the best options are home equity loans, which allow bor- rowers to keep the same low rate they have on their first mortgage while getting the cash they need. And while most home equity loan originators are brokers, there are also growing opportunities for correspondent lenders in this space. As Peanuts creator Charles M. Schulz once wrote, "Life is like a 10-speed bicycle. Most of us have gears we never use." For originators looking to grow business, it might be time to use those extra gears—starting with an experienced home equity lender with the capital partners and track record of making the borrowing experience as simple as a bicycle ride. . SAKET NIGAM is SVP, Capital Markets, at Spring EQ, a leading nationwide refinance, home equity and HELOC lender. Headquartered in Philadelphia, Spring EQ is among the fastest growing and most awarded lenders since its founding in 2016. Nigam, who brings more than a decade of experience working in the mortgage capital markets, is responsible for leading the company's continued growth in the consumer-direct and wholesale mortgage markets for first and second mortgage products. He has significant leadership experience and secondary mortgage market expertise and got started in the capital markets in 2009. He can be reached at snigam@ springeq.com. SOMETIMES, IT'S GOOD TO BE A FOLLOWER. Follow MReport on social media to put the latest mortgage banking news, stories, strategies, and insights at the touch of your fingertips. MReport @TheMReportNews The MReport powered by THEFIVESTARINSTITUTE