6 questions mortgage lenders must answer before offering home equity products

In some depositories, home equity is not part of the mortgage operation. Instead it is lumped with other forms of consumer lending, both secured and unsecured, as those loans tend to go into asset-backed securities.

That is a suboptimal situation, Boyle said.

Consumers are looking for a digital experience where they can self-serve and they can shop but they also want all of their options, especially when it comes to their home, in one spot. “They don’t want to have to go over here for this and over there for that,” said Boyle. “I think those bankers that are going to be successful going forward will resituate themselves to thinking about it from the consumer lens as opposed to the execution in the capital markets.”

Furthermore, having a unified experience with mortgage and home equity is a competitive advantage for these lenders, especially when consumers deal with solicitations from other providers, Boyle noted.

It also includes having the right technology in place that lets the loan officer get the full picture of the borrower when it comes to mortgage and home equity.

“Bankers are already sitting there with a full cadre of information about that consumer and in many cases can just run the options,” Boyle said. Those marketing both products can use technology to tell the customers, “Well, I know a lot about you because you bank with us; let me just double check some of your information.”

No matter which product, lenders need to make this an easier process for their customers. A disjointed process will impact lenders ability to execute the transaction for the consumer, especially as the client is getting solicited by other providers, said Boyle.

It’s the old adage about a consumer being able to walk into a lending institution and obtain a car loan — a depreciating asset as opposed to a home — “very, very simply,” Ferringer said. “And yet, regardless of the mortgage product, I don’t believe we’re still there yet for what the consumers are expecting that process to look like.”