loanDepot announced its plans to offer new home equity products, once again making waves in the industry after breaking the news that it was moving into personal loans earlier this year.
"As the economy continues to improve and home prices have stabilized, there is a growing reservoir of equity to help borrowers capitalize on their options to manage their credit profiles," said Brian Biglin, chief risk officer with loanDepot.
“For example, consumers across the country who have legacy home equity products may experience payment shock this year as these loans reset. There are also tens of thousands of homeowners who took out higher-costing personal loans over the past few years who can use our home equity products to lower their effective borrowing costs and substantially decrease their monthly payment," Biglin continued.
Features of the home equity products include:
- Loan amounts ranging from $25,000 to $250,000 for cash-out financing or home purchase
- Up to 95% loan-to-value for certain borrowers and transactions
- Fixed terms up to 30 years
- No pre-payment penalties so borrowers can pay off principal anytime
In addition to the new home equity products, loanDepot will offer second mortgages to borrowers starting in September.
This news falls right in line with the lender’s recent market growth. The nonbank has made huge moves in the industry since the company opened its new co-headquarters in Plano, Texas, just two years ago.
In May, loanDepot said it planned to hire 1,000 additional employees to support its growing prominence in the industry.
And shortly after, it broke into the personal loan space, which has already experienced rapid gained market acceptance, with funding volume in the first two months of launch reaching more than $40 million.
The latest industry rumor surrounding the company is that it is vying to purchase Discover Home Loans. The lender accepted its final loan application at the end of July, leaving the company vulnerable to eager lenders waiting to buy what little remains of the credit card company's foray into the mortgage lending business.
"The delivery of a home equity product immediately following the launch of our personal loan product confirms the agility and scalability of our tech-enabled lending platform," said Anthony Hsieh, CEO and chairman of loanDepot. loanDepot is not commenting on the Discover rumors.
"Our vision is to deliver a diversified lending model sustainable in all market conditions. We look forward to leading the development of marketplace lending through the introduction of new products and services that provide credit solutions for borrowers with attractive returns for investors," added Hsieh.
