“Obviously, demand for loans in general is subdued,” Stratis told Mortgage Professional America. “Purchase markets are down, the refi markets are down. All the conversations that I’m having with brokers typically revolve around second liens and HELOCs. And I tell them that a HELOC is a really elegant way to meet a given customer’s need today and get cash in their hands.
“But more importantly, the beauty of it is you’re establishing a relationship that will help you get a cash-out refi when the time comes. And so, it’s one of those rare opportunities where you can truly meet a customer need now, get paid for doing that, and at the same time plant the seed for the next transaction that’s going to happen.”
Stratus said mortgage companies are often able to help brokers close home equity loans in a fraction of the time as a refinance, for less in closing costs.
“The reason that HELOCs were never sexy back in the day, five or 10 years ago, is because the typical loan officer wasn’t going to bother with an $80,000 HELOC,” Stratis said. “They still have to do all the paperwork and all the underwriting. It’s as much work as a refi, and they were going to get paid $100 or $200.
“Nowadays, these companies offer the least amount of effort required from a loan officer to actually price one of these and underwrite. They can have it done in days, with little to no effort, and make a customer pretty happy. It’s not the same product they knew from five to 10 years ago.”