There are many adjectives I have heard to describe 2020. Some of these may be considered R-rated so I am reluctant to repeat them here! However, some of the G-rated adjectives are wild, busy, unusual, odd, strange, and frustrating. One word I have not heard to describe 2020 was uneventful.
Home equity lending has been a staple of community banks and credit unions for many years, having been a valuable source of funds for life events for families across generations. These loans are offered in varying loan types, whether open-end HELOCs or fixed-term loans, with different guidelines around credit scores, debt-to-income ratios, and combined loan-to-values (CLTVs). The exact loan types and guidelines offered are determined by the lender’s risk tolerance for the product. One of the most challenging aspects of structuring a home equity program is identifying your maximum combined loan-to-value limit. Utilizing a credit default insurance program can make that decision easier.
If you are in the mortgage lending business, not only have you been dealing with all the issues related to the COVID-19 pandemic, but many of you have been dealing with record loan volumes as well. While purchases have been scattered about, borrowers looking to refinance during these historic low rates have been applying in droves. Fannie Mae recently announced they expected $1.5 trillion in refinances in 2020. This would represent a 51% increase from 2019.