LendingTree: Renters owe $9.7B in late rent
Up to 16.2% of renters nationwide are behind on rent payments, according to a LendingTree analysis of U.S. Census Bureau Household Pulse Survey data. Assuming every adult who reported being behind on rent owes $1,097 – the median monthly gross rent in the U.S. – the combined amount owed would amount to $9.7 billion.
Furthermore, up to 26% of the participants surveyed reported having “little to no confidence in their ability to make next month’s rent payment on time,” analysts wrote.
The top three states by percentage of renters reporting they were not up to date with rent payments from Sept. 30 to Oct. 12, 2020, when LendingTree conducted the research, were Mississippi 29%, Louisiana 28.3% and Tennessee 24.8%.
The report highlights the urgency of the situation for millions of renters as the Dec. 31, 2020 deadline for the federal and state level eviction moratoriums approaches.
Renters in general are often at a higher risk of financial distress, said Tendayi Kapfidze, LendingTree’s chief economist. “A lot of renters unfortunately don’t have a rainy-day fund or an emergency fund.”
Millions of renters have defaulted on their rent and struggling to make ends meet, and they represent different percentages of the state population in each state.
Since the actual number of renters differs by state, the amount owed offers a better measure of where are the higher numbers of struggling renters who potentially will need federal or state rental assistance, and by default, also indicates where the higher amount of debt owed by property owners may turn into mortgage defaults and/or forbearance requests.
For example, Mississippi reported the highest rate of renters in default by percentage but not by dollar amount owed.
Renters from Mississippi owe more than $79.8 million, those in Louisiana owe over $156.3 million, and those from Tennessee almost $235 million, suggesting more people are in hardship in Tennessee than in almost both those states.
In California, 15.2% of renters were behind on rent – ranking 26 – even though the total amount owed by California’s renters was the highest of all 50 states at over $2.1 billion. It reflects the state’s size and shows almost one fourth of these renters in hardship live in California.
Similarly, New York ranked eighth with 20.9% of renters in default, owing more than $1.2 billion in unpaid rents, the second highest amount in the country.
The bottom three states were: Montana with 4.2% of defaulted renters owed over $6 million, Vermont with 6.8% in default owing $6.4 million and Utah where the 8% of renters in default owed $40.5 million.
The report also provides key demographic insights by age, race, household income, and funds renters used the week before the survey.
Up to 35.1% of renters ages 40-54 were not confident they would be able to pay rent on time in November, the highest percentage of all groups, compared to 27.6% for 25-39 year olds and 22.5% for those aged 55-64.
The same holds true for 35.5% of Blacks, 34% of Latinos and 21.1% of Asians, 19.5% of Whites.
BBVA offers bank-branded HELOC platform
BBVA USA launched a digital Home Equity Line of Credit (HELOC) application powered by Prosper Marketplace Inc. one year after their collaboration started, and in time to assist the growing number of equity rich homeowners nationwide.
BBVA USA, a subsidiary of Madrid-based BBVA, reportedly made the announcement after the two firms co-designed and launched the digital HELOC solution in 2019 through the Prosper platform to provide customers with “the ability to complete an online application in minutes and receive instant pre-qualification.”
The collaboration leveraged Prosper’s consumer lending process of applying and obtaining a loan to make the origination of a HELOC quicker and easier, while BBVA contributed its equity lending expertise. Early results showed the digital solution is helping BBVA close HELOCs 14 days faster on average when compared to the Bank’s own turn times on applications submitted in other channels.
BBVA USA is the first bank partner to power its digital HELOC application using Prosper’s technology on its website, the company explained in a statement. BBVA market tested the application for over a year, as an exclusive bank partner, which allowed BBVA locations in Alabama, Texas, Florida, New Mexico, Colorado and Arizona to access Prosper’s HELOC application via Prosper’s website.
Since 2005, Prosper has been operating an online lending marketplace that connects investors with borrowers looking for fixed-rate, fixed-term personal loans originated through the Prosper marketplace via WebBank.
Prosper’s digital HELOC platform, developed to simplify the origination process, currently is available to BBVA USA customers in select states via the BBVA-branded version of the platform.
“We are excited to expand our relationship with Prosper by using their digital platform to power our online HELOC application process. Customers’ expectations are continuously being shaped by faster delivery and more convenience like they experience in other industries,” said BBVA USA head of mortgage banking Murat Kalkan.
In a time when banks are pulling back their HELOC offerings, BBVA has seen “a significant improvement in the number of customers who complete the online application,” underscoring how technology improves the customer experience, continued Kalkan. This partnership aligns with BBVA’s goal “to meet rapidly evolving customer expectations,” so customers can quickly tap into the equity they have in their homes for their major financial needs.
“Consumer spending on home improvement has risen over the past six months as people spend more time at home during the pandemic. A home equity line of credit is a great option for financing a large project as it offers flexibility and access to low rates,” said David Kimball, CEO of Prosper. “With Prosper’s digital HELOC platform, it’s easier than ever to apply online.”
User highlights include: an online application that can be completed within minutes with instant offers and information about rates and qualification status; easy access to a dedicated client services team and immediate answers to HELOC questions; electronic documentation uploads and disclosure delivery; ability to apply remotely, from anywhere.
“Aspiring to provide a seamless experience to our customers in their HELOC applications is one of the core drivers of our strong growth in home equity business, even as we see a lower overall production in the industry,” said David Garcia Hernandez, BBVA USA director of home equity originations. “We are looking forward to unlocking the true potential of home equity through this platform.”
Secure One to train, develop talent organically
Secure One Capital announced the kickoff of its B.E.S.T training program led by the company’s human resources manager Bill Robertson who also will take on the new role of corporate training manager. The course primarily will focus on training and developing employees.
“The BEST training program, which is an acronym for Building Elite Sales Trainees, will focus on developing new talent into mortgage professionals inside the Secure One Capital business model,” said Walter A. Mar, vice president of people and culture.
A privately held mortgage lender in business in Orange County since 1995, according to its website, the Costa Mesa, Calif., headquartered company projected to fund nearly $1 billion in mortgage loans across twelve states in 2020.
Robertson is a mortgage market veteran, who joined Secure One Capital in February 2017, but has been in the industry for 25 years. He is a well-regarded instructor and course developer, experienced in teaching the Nationwide Multistate Licensing System & Registry (NMLS) 20-hour SAFE Course, continuing education courses, an 18-class mortgage training program, and an 8-hour NMLS Test Prep Crash Course.
“We bring on people who are a good fit for our culture, we promote from within, and if they work hard and smart, they will be recognized and rewarded,” said Robertson. “I am excited that my primary focus will be on teaching again. I love sharing the knowledge and experience I have collected since entering the industry in 1995, especially with those who are embarking on a new career in our industry.”
“We are excited about Bill’s ability to teach mortgage lending with a level of enthusiasm and expertise that makes learning interesting and fun,” said CEO, Jim Pate. “He will work to ensure that our new team members embrace our promise of ‘A Better Mortgage Experience’ for our clients, coast to coast.”
So far, Secure One Capital has featured in the Inc. Magazine list of 5,000 Fastest Growing Companies for the fourth time and won the BBB Torch Award for Business Ethics in 2018.