LendingTree: 46% of HE loans used for home improvements

The COVID-19 quarantine appears to have inspired more homeowners to take advantage of the short and long-term benefits of using home equity financing to make home improvements. As of April, an average of 45.9% of home equity (HE) loans were used to fund home improvements across the nation’s 50 largest metros, up from 37.3% in January, according to a Lending Tree report.

The new report is statistically significant as it sourced data from more than 45,000 LendingTree website users who submitted requests for HE loans from Jan. 1-April 30, 2020. (Most reports rely on data pools slightly larger than 1,000.)

Even the average growth rate of HE loans for home upgrades or simple renovations across all 50 metros was noteworthy at 25%, with only eight metros not on trend.

The report shows how priorities have changed since the start of the pandemic highlighting “how even though COVID-19 has slowed most of the economy, people are still willing to take out loans and spend on home improvements,” the report notes, with projects varying from relatively simple and inexpensive, to very costly.

Consistently across almost all top 50 metro areas, those who do apply for a home equity loan are more likely to use it to pay for home improvements than they might have been only a couple of months ago.

The metro areas with the highest share of HE loans designated for home improvements were Milwaukee at 66.7%,Louisville, Kentucky, 60%, and Columbus, Ohio, 56.6% – which brings the average share of HE loans used for home improvements across these three metros to 61.1%.

Metros where HE loans were used the least for home improvements wereSan Jose, Calif., at 30.8%, Hartford, Conn., 36.1% and Raleigh, N.C., 36.2% bringing the lowest average down to 34.3%.

Plaza Home expands $4M reverse jumbo refi to 11 states

San Diego, Calif., based wholesale and correspondent mortgage lender, Plaza Home Mortgage, Inc., has expanded its proprietary Reverse Jumbo mortgage program to eleven states.

The program is now available in Arizona, California, Colorado, Connecticut, Florida, Hawaii, Illinois, New Jersey, Oregon, Texas, and Utah.

“Plaza is expanding its program in response to the growing demand from older homeowners for flexible financing and income solutions,” said Mark Reeve, Vice President, Reverse Mortgages at Plaza Home Mortgage.

In fact, earlier in May some of the nation’s largest lenders, including J.P. Morgan Chase and Wells Fargo temporarily stopped providing home equity line of credit (HELOC) lending opening the space to other lenders, especially those who specialize in home equity conversion mortgage (HECM). What makes HECMs attractive, says Rob Chrisman, is that unlike HELOCs, “HECMs can’t be canceled, recast or frozen,” and give borrowers flexibility in making monthly mortgage payments.

The Plaza Home jumbo program offers refinance loan amounts of up to $4 million with no Federal Housing Administration mortgage insurance requirement.

The fixed-rate program is available through Plaza’s Wholesale channel and covers a wide range of property types including single-family and two to four unit residential properties, townhomes and condominiums, and has no minimum or maximum lump sum payout requirement at closing.

The program is available to refinance, or seasoned HECM options, jumbo loans of up to $4 million, or switch from jumbo first mortgages to HECM. Application and qualification guidelines are very similar to Plaza’s other HECM offerings in terms of credit, income, and age requirements.

“The program enables brokers to better serve seniors and older baby boomers in high-cost housing markets,” said Reeve. “We expect to continue rolling out this program to additional states and to add adjustable rate and purchase options in the near future.” 

Black Knight introduces mobile property inspection app

Global fintech Black Knight, Inc. has introduced Black Knight SCOUT, a cloud-based application that enables remote property inspections and data collection including important details and photos without requiring an appraiser to enter the property. Instead, SCOUT posts the information collected by the homeowner electronically, so the appraisers can review it and add insights and expertise, using their existing desktop technology. 

The property data mobile application is accessible on Apple and Android phones, or tablets. The app takes users through a series of questions and prompts with easy-to-follow instructions, and on average, the entire inspection process takes 15 to 30 minutes, depending on the property.

Platform users, including the lender or the appraisal management company (AMC) representatives who work with lenders, do not need a specific software or system to interface with SCOUT to order inspections and appraisals.

Once a lender or AMC orders a property inspection, the borrower/homeowner receives an automatically generated email with a link to the cloud-based SCOUT application. The app then generates a data-rich property inspection report, uploaded to the portal for the appraiser to access and complete a professional assessment of the property. 

To help minimize fraud and support accuracy of the information submitted, SCOUT has built-in security measures, such as pre-populated property information, Global Positioning System or GPS location tracking with date/time stamp; direct input of photos to the application so there is no need to upload; finger signature certification by the homeowner and other fraud prevention features.

Black Knight has pledged to offer AMCs a free extended trial SCOUT “to help keep appraisers and homeowners safe during the COVID-19 crisis” and enable real estate transactions to proceed. “We want to help the industry during this difficult time with a solution that is easy for homeowners to use and that supports appraisers,” said Mike Sklarz, EVP, Managing Director, Black Knight Collateral Analytics.

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