Mortgage servicer BSI Financial Services has been selected by Unlock Technologies as the backup asset manager for the recently closed Unlock HEA Trust 2023-1 securitization, the industry’s first rated securitization of home equity agreements (HEAs).
The $224 million securitization consists of Class A and B notes with ratings of BBB (low) and BB (low) from DBRS Morningstar, which finalized its ratings criteria for the HEA asset class earlier this year.
BSI is now working as the primary or backup servicer for four of the top five providers in the burgeoning home equity investment (HEI) market. BSI Financial currently manages the assets for 11,000 HEAs with an aggregate contract balance exceeding $1 billion.
According to a recent report by TransUnion there is $22.1 trillion of tappable home equity in today’s market, but homeowners with a sub-620 FICO score, have limited access to traditional mortgage products.
Unlock’s HEA enables lower FICO homeowners to access a portion of their home’s equity without having to take out a loan or having additional monthly payments. Homeowners typically use HEA funds to pay off high interest consumer debt like credit cards or to fund home remodels or college tuition.
“BSI Financial is thrilled to be a part of this industry first,” says Allen Price, senior vice president of BSI Financial Services, in a release. “Over the past year, our unparalleled service and technological capabilities are quickly making us the go-to servicer in the HEI market. Teaming up with Unlock affirms our ongoing commitment to innovation and excellence in this growing space, and we look forward to a long and productive relationship.”
“BSI Financial’s experience in HEI asset management was one of the reasons why Unlock chose the company as our backup servicer,” adds Brian Elbogen, chief investment officer at Unlock. “Having BSI as part of our servicing strategy allows us to focus on pioneering new and better ways to help everyday Americans to tackle their financial challenges without accumulating more debt.”