A record amount of home equity wealth is propelling the creation of diverse equity-release products designed to help homeowners leverage this wealth.
ComplianceEase, a 2017 Tech100 winner, is one of many companies betting on the future growth of home equity lending.
For some time, the company’s ComplianceAnalyzer has been able to audit both closed-end and open-end mortgages for federal, state and local requirements.
Now, the California-based company has announced some major changes to this platform that will ease compliance concerns for home equity lenders.
ComplianceAnalyzer now has the ability to audit HELOCs for state licensing requirements, permitting nonbanks, banks and credit unions to audit in the majority of states in which they are licensed.
Furthermore, depending on the state license, ComplianceAnalyzer can test HELOC originations for interest rates, restricted fees, late fees, grace periods and prepayment penalties, according to the company.
Currently, the solution covers more than 80 licensing types in 42 states, but this reach is expected to grow.
ComplianceEase President John Vong said banks and nonbanks are increasingly interested in home equity lending, which is unsurprising given the statistics.
“With rising home prices creating equity, one estimate says that 44 million homeowners now have more than $6 trillion in ‘tappable’ equity and could be candidates for home equity lines and loans,” Vong said.
But Vong said the patchwork of different state regulations for both real estate and consumer lending has presented compliance challenges for lenders with multi-state footprints.
The updates to the ComplianceAnalyzer have been designed to bring some relief.
“Our new enhancements to ComplianceAnalyzer mean that lenders can now use their preferred system for first mortgage compliance to reduce exposure to potential state licensing rules for HELOCs as well,” Vong concluded.