Mortgage document preparation vendor International Document Services (IDS) reports that as of the end of the third quarter, its customers had already drawn more home equity line of credit (HELOC) loan docs than they did in all of 2013.
What's more, the firm is forecasting that if volumes stay at current levels, HELOC loan doc draws this year could exceed those of 2013 by nearly 65%.
‘Rising home prices have certainly encouraged borrowers to tap into their homes' equity,’ says Mark Mackey, executive vice president of IDS, in a release. "Because so many people were able to take advantage of the relatively low interest rates over the past few years, they are now highly incentivized to stay in and improve their existing home."
Meanwhile, the firm's data shows that conventional and Federal Housing Administration loan doc draws increased almost 5% compared to 2013 volumes during the same period, and both Veterans Affairs and U.S. Department of Agriculture/Rural Development loan doc draws are up around 10% and 17%, respectively.
‘During a time of declining volumes industry-wide, IDS has seen the exact opposite,’ Mackey adds. ‘Our loan doc volumes continue to increase year over year, and that's due in large part to steady requests from existing customers, as well as business from new customers.’
As Mackey points out, those lenders that have new technology and automated processes in place seem to be the ones doing more business in this current lending environment.