Home equity lines of credit (HELOCs) have made a huge comeback in recent years, fueled by a confluence of factors that includes record-high home prices during a slow housing market, high interest rates, and homeowners amassing large amounts of equity.
As demand for purchase and refinance mortgages softens and the runway for HELOC growth lengthens, lenders are pivoting towards HELOCs—now one of the fastest-growing consumer-loan categories—as well as closed-end home equity loans, which remain popular.
Non-traditional home equity products have also emerged in the marketspace. Home equity sharing agreements (HESAs) may be called home equity investments, home equity contracts, or shared appreciation mortgages. They allow a consumer to receive a lump sum loan upfront in exchange for a portion of the home’s future value or change in value.
Lenders and servicers in the home equity space are encountering a risk landscape for both traditional and non-traditional home equity products that is significantly different from years past. Bradley’s skilled attorneys counsel our clients on the many complex issues around home equity lending, such as the unique state and federal laws that apply to them and the enhanced risk of cybercrime. Our team understands the evolving opportunities and risks in the home equity space, and we provide guidance that helps client adapt and thrive in this highly specialized sector.
Our Home Equity Lending team is composed of attorneys from Bradley’s nationally ranked Banking & Financial Services Practice Group, including a former chief counsel for the home equity line of business at a Top 10 U.S. bank, who have spent their careers advising banks and financial institutions of all sizes. We also draw on the resources and experience of our
Reverse Mortgage,
Cybersecurity & Privacy,
Consumer Financial Protection Bureau (CFPB),
Financial Services Litigation,
Fintech,
Regulatory Compliance,
Government Enforcement & Regulations,
State Attorneys General & Regulators, and related practices to provide full-spectrum HELOC counseling services.
We regularly offer guidance on a range of home equity issues to traditional lenders, nonbank lenders, and fintech companies, including the following services:
- Advising lenders regarding product development and related risk management
- Drafting and updating documentation and disclosures, including loan agreements, security instruments, and Regulation Z initial disclosures
- Comprehensive review of all federal and state notices
- Home equity servicing and fraud risks
- Training company personnel on best practices around HELOCs
- Review of security/account verification measures
- HELOC fraud litigation and criminal referrals
- Responding to CFPB and other state/federal agencies
- Internal and external audits/risk assessments
Whether you’re creating or expanding a home equity program, responding to a fraud incident, facing borrower litigation, or preparing for a regulatory examination, Bradley’s Home Equity Lending team is your partner in identifying and managing risk while positioning you for growth in this emerging space.
