Equity Soars To Record $11 Trillion

The recent surge in home prices pushed U.S. homeowners’ tappable equity to a record $11 trillion. Prices were on a run in March, according to the ICE Home Price Index, up 1.2% and more than 25% above the 25-year average increase. This is the third straight month of above-average gains as stock shortages keep competition for limited homes high. As a result, mortgage holders’ equity shot to a record $16.9T in Q1, $11T of which can be leveraged while retaining a 20% equity cushion, both of which are all-time highs. “We’re still very much in a hole from an inventory perspective, but that deficit has fallen from 50% a year ago to 38% in March. Today, with 3.3 months of…

Newfi Launches Shared Appreciation Mortgage, EquityChoice

Wholesale Non-QM lender Newfi Lending announced EquityChoice, a new type of shared appreciation mortgage. The product comes in response to record-high equity amassed by Americans since the pandemic housing boom. High rates are keeping that equity stored away, as many homeowners are reluctant to tap into it through traditional financing options. EquityChoice gives homeowners access to cash with a below-market fixed interest rate, and shares in a portion of their future home appreciation. Company leaders say homeowners don’t need to factor in additional monthly payments or worry about soaring rates when considering using the equity in their homes. “Newfi has created a groundbreaking new offering that meets homeowner needs for liquidity by combining the benefits of home equity sharing options…

Purchase, Home Equity Lending Weakness Hurt Q3 Originations

Mortgage originations fell by 3% in Q3 2023, reversing a spike in Q2 and marking the ninth decline in ten quarters, according to new data from ATTOM. Purchase and home equity lending (both -7%) induced the drop as interest rates stuck above 7% over the summer.  These declines wiped out gains in refinances, which were up 5%, the second straight quarterly increase. ATTOM attributes the refi boost to homeowners taking advantage of cash from their sky-high equity. Though some homeowners lost equity in Q3, it remained strong overall as home prices soared earlier this year, leaving Americans with plenty to borrow against. The downturn pushed residential lending activity down 26% YOY and 63% from a high point in 2021 during…

Home Prices Slipped YoY But Rise Monthly

Data released today shows national home prices slipped year-over-year in May but continue heating up in the short term, with month-over-month prices rising. Year-over-year, prices fell by 0.5%, down from -0.1% the prior month, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index. The 20-City Composite posted a -1.7% year-over-year decline, unchanged from the month prior, as home prices have recently seen a boost. Craig J. Lazzara, managing director at S&P DJI, noted that regional differences are still “striking,” with the West Coast hubs that saw huge migration during the pandemic having the weakest growth. The Southeast (+2.1%) continues to see strong growth, though this month its top-performer crown was stolen by the Midwest (+2.7%). Looking at cities,…

Black Knight Launces AI Valuation App For HELOC Lending

Black Knight introduced a new app to speed up applications for home equity lines of credit, the company announced. The app, Validate, allows borrowers to include photos of their property as part of their application. The photos are then analyzed with AI to calculate the home’s condition in real-time, speeding up the approval process. Borrowers complete a questionnaire to verify public record data and list any necessary repairs after submitting photos, Black Knight said. Photos are time-stamped and GPS verified to ensure current property condition and location are accurate. The address is then scored based on comparable properties to create a condition-adjusted valuation model. Lenders receive the property value and available equity immediately via API or PDF, saving time and…

Dan Kellett Named CTO Of FirstClose

Dan Kellett has been named Chief Technology Officer of the data and workflow solutions company FirstClose. In his new position, Kellett will oversee FirstClose’s technology and strategy regarding applications, data, cybersecurity, and infrastructure. “It’s exciting to join FirstClose at this time of immense change, challenges, and innovation in the mortgage industry,” Kellett said. “FirstClose’s focus on providing a true digital home equity experience makes this a unique opportunity, and by expanding the ecosystem leveraging our platforms and provider network, we’ll increase our speed of adoption which will keep us at the forefront of mortgage innovation.” Kellet brings more than a decade of software engineering and leadership experience to the position. Prior to FirstClose, he served as Head of Technology and…

Rising Property Taxes Add To Financial Stress For Homeowners

Property taxes are on the rise, another source of financial stress for Americans. According to new data released by ATTOM Data, total property taxes on single-family homes across the United States increased by 4% in 2022, totaling $340 billion.  This marks a significant increase from the previous year, with the average property tax bill for a single-family home rising to $3,719. Property taxes were highest in the Northeast, with New Jersey, New York, and Connecticut topping the list. The lowest were seen in the South, with Alabama, West Virginia, and Arkansas having the least expensive property taxes. Increasing taxes are an effect of soaring home prices, which have increased by 19% over the past year. Though homeowners have benefitted from…

Fintech LenderClose Rebrands To Coviance

Fintech LenderClose announced it is rebranding as Coviance, the company announced in a press release. The rebrand “reflects the company’s next phase of growth” as a transformative technology partner that allows lenders to efficiently scale home equity volume and close in a matter of hours. “The evolution of our technology has advanced us into a new era on our mission to perfect the lending experience,” says Omar Jordan, Founder & CEO of Coviance. “Our technology empowers Credit Unions and Community Banks to compete with fintechs, delivering the best borrower experience with a more humanized touch.” Coviance was founded in 2015 by Omar Jordan with the goal of offering community lenders a user-friendly tech solution to lend more efficiently, faster, and at…

Mountain America Offering Instant Home Equity Through Blend

Mountain America Credit Union is offering home equity through cloud banking software Blend, according to the companies. Mountain America will use Blend’s Instant Home Equity solution to provide members access to a fully digital end-to-end home equity solution that will cut down its application approval times. “Our focus is always on our members and providing them with the financial resources that help them define and achieve their financial dreams,” said Amy Moser, senior vice president and chief lending officer at Mountain America.  “Working with Blend supports our prioritization of identifying ways to provide our members with personalized financial experiences in the context of home equity lending that help us achieve our goals and provide an outstanding member experience.” Users will…

Homes Bought In 2022 Face Rising Underwater Risk As Prices Cool

Americans who bought a home this year are facing rising underwater risk as home prices cool. Black Knight’s October Mortgage Monitor found that 8% of homes bought in 2022 are now at least marginally underwater, while almost 40% have less than a 10% equity stake in their homes. “Make no mistake: negative equity rates continue to run far below historical averages, but a clear bifurcation of risk has emerged between mortgaged homes purchased relatively recently versus those bought early in or before the pandemic,” said Black Knight President Ben Graboske. “Risk among earlier purchases is essentially nonexistent given the large equity cushions these mortgage holders are sitting on. More recent homebuyers don’t fare as well.” This is a particular issue…