Preliminary Agenda
General Themes
The Home Equity Economy: Evaluating Key Demand Drivers & Performance In Different Economic Scenarios
* What are the economic factors that are impacting CPRs going forward * How much tappable income does the homeowner have? Why are consumers tapping equity and what products meet those needs? * Where are credit scores going? Who cares about stinking credit scores? * What is investor demand like for home equity products? * Need to knows on capital treatment of home equity products * Prepay speeds of different home equity products and where they are going * Financing the industry * Freddie pilot program and future agency involvement *Where is future home valuation going? Over- and Under-performing markets going forward
An Overview of What Is Different Today About The HEI & Home Equity Loan Universe
* How are banks and non-banks meeting consumer demand for home equity? * Looking forward on product development * The servicing side * The journey of 1000 miles starts with 1 step… How many steps are the regulators into these products? * Underwriting on home value vs. credit strength * What is the typical max equity you are underwriting? What are transaction costs? * What to learn from EasyKnock* Distribution models
A Comparison Of HEI & Home Equity Debt Products Risk/Risk Management
* How much consumer risk you need to worry about? How are you calculating income? * Different economic scenarios * How are you managing home appreciation downside?* Risk and capital requirements * We just went through a record home appreciation… What if it doesn’t continue? * What happens if owners can’t refinance? * How much risk is there that shared appreciation deals would be classified as a debt product? * Risk management best practices when underwriting new deals * How tail risks wags the tail * Mark-to-market considerations for debt products * Prepayments of equity and debt home equity How institutional investors look at risk vs. originators
Women’s Small Group Meeting
Your journey, inspirations, leadership lessons and latest on working in these changing home equity markets will be among the focuses of this two-way discussion
Insiders Evaluate Potential Local & Federal Regulation & Consumer Protection
In an environment where regulators are starting the long journey to figure out the regulatory regime of these products practitioners will give you the latest legal and regulatory updates and guess if the future is looking sunny or overcast regarding
* Where are home equity products in regard to risk-based capital standards? * What is institutional capital concerned with * How do usury laws apply? * State of the states that concern you * Any pending court cases and litigation to watch? * Impact of Collins et al vs. Unison * What is up at the CSFP, FTC and GSEs * Avoiding what got EasyKnock in trouble * What are consumer groups saying and how to combat
An Introduction & Comparison Of The Next Gen Of Home Equity Investment Products (virtual pre-conference Feb 27- 2:00est)
* What are HEIs? How do they compare with other home equity products? * Looking at distribution models and how these products are being marketed? * What you need to know about regulations * Equity-rich homes vs. downpayment products * Home current and future valuation vs. consumer credit strength * What does underwriting look like? * Exit strategies, secondary market transactions, loan buying and securitization * How do you make sure the homeowner maintains their property * Appraisal, title, property insurance and other plumbing need to knows * What an investor needs to know
https://us06web.zoom.us/webinar/register/WN_TDQWmUaESL2wz6AuaPFwYQ
Business Structure/Models: What Is Behind The Black Box For Different Origination Products?
* Fees and structures * Shared appreciation deals for distressed homeowners * Treating early payoffs * Valuation and how much you discount * What are the latest additions to your co-ownership agreement? * When the house gets sold… * How much equity does the consumer give up for how long? * Personnel needs as you grow * What kind of products allow for a junior position? * What happens to equity if senior becomes delinquent? * Can investor force a buyout? * Valuing and future valuation
Is the Home Equity Markets Future So Bright I Need To Wear Shades Or Will We Wind Up Like Subprime?
* Can regulations steal the golden goose? Basle 4, SEC rule 2a-5, debt classification + what else is out there * How are the large banks and non-banks looking at these products? * What needs to be standardized? What will it take to become a pension/insurance investment product? * What happens if owners can’t refinance? * What if home equity appreciation stops? * Industry convergence, mergers and acquisitions: When they can happen? * Product demand and stress testing home equity products in different market scenarios
Home Equity Demographics & What Are You Looking For In A Customer? Why?
* How much equity do your clients have? How much is tappable? * Who are the best homeowners for different home equity products? * What are the typical uses of capital for a loan? * Do older boomers go for reverses over HEI? If you don’t qualify for a reverse yet… * Income amount and source you are looking for * Which products are available for distressed homeowners? How do you define a distressed homeowner? * How has the changing economy changed the demographic profile of the homeowner? * Demographics/markets that you are in, looking at or avoiding/dropping?
Originators & Investors Closed Door Discussion
Share best practices in this meeting where your questions and experiences will drive the discussion.
Capital Markets & Raising Equity For Home Equity Products As Future Rates Are Anyone’s Guess
* Take out option liquidity, documentation and pricing; Comparing securitization aggregators vs. balance sheet buyers * Different products: investor favorites and how easy they are to securitize * Should you consider diversifying your funding sources between securitization and balance sheet buyers even though it might ding your ROI * What is the implication of unutilized HELOC draws on liquidity and pricing * Communications and reporting * What kind of leverage are you targeting? * State of warehouse line world and its impact * What are different capital partners looking for? What are they evaluating?
Origination
How Are you Educating The Consumer & Other Market Participants?
* What kind of education are you providing for brokers and financial advisors? *What are the key misconceptions about these products? * Role of servicer in education * What is in your on-line tutorial * How are your making the media and public awareness? * The senior market: Reverses vs. equity products * What kind of hand holding do you do during the application process?
Consumer Facing: Underwriting, Origination, Credit, Analytics & Data-Driven Decision Making
* What do you look for in a house or customer? Engage with technology * Risk management and past defaults: When would you underwrite? * Post-funding support * Income and credit vs. house value * Issues around closing, costs and fees * Underwriting standards and capital requirements * Where are credit scores going? * What are consumers looking for?
Expanding Your Outreach… Creating Awareness Of Home Equity Products For Underserved Markets
* Downpayment assistance programs vs. unlocking existing equity * Successfully working with not-for-profits, faith-based organizations, community leaders and other community-level outreach * What is your multilingual strategy? * How should you be utilizing social media and digital platforms differently? * How to conduct outreach events? How successful have you been? * Differences in one-on-one counseling * Working with local media * Is it all about SEO?
AI, Data, Tech & Home Equity
* Using the blockchain * Consumer engagement and training tech * Origination, underwriting best practices and technology * Customer engagement technology that is sticky * Investor-driven data and technology * Valuations and appraisals * Data-driven decisions and what unique information are you paying more attention to than a couple of years ago * ROI and brain damage of different programs
HEI Origination
“C-Level” HEI Origination Plenary
* What are your newest initiatives to find customers? * What kind of partners have you been taking on: What kind have you been rejecting? * Tales from the dark side… Trying to get new products pass the regulators * What does your newest product look like? * How has your underwriting changed over the past few months? * What is your policy on homeowners who at term cannot refinance? * What is your plan if HEI is re-classified as debt? * Do you underwrite second homes, flips and vacation rentals? Have you been full speed ahead or what has been holding you back?
The Home Equity Investment (HEI) Origination Market: Winning Approaches To Increase Volume
* How large is the market? How much can the market grow and the impact of different interest rate and economic scenarios * How much of a risk is reclassification? Which states should concern you? What kind of litigation is out there? * Looking at wholesaling and other 3rd-party origination vs. direct to consumer * Cost vs. liquidity: Digital vs. traditional documentation/origination * Straight HEI vs. HEI hybrids * Market liquidity… What is the securitization market looking for? Whole loan buyers * What is your credit and geographic box? How do you underwrite different markets with different growth expectations? * Funnel of applications and the ratio of acceptance * Navigating TRID requirements * Market education: Consumers, investors or 3rd-party originators * What is the % of customers that went through the whole cycle and have been liquidated? What has been the ROI?
Home Equity Investments For New Homes: Lease to Own & Downpayment Assistance Products
* What is the profile of your client? * Client vs. market evaluation during underwriting * How do you finance the home purchase? * How do you monitor mortgage, tax and insurance payments? What are your loss mitigation practices if the client falls behind? * What does a foreclosure look like? * Do you allow seconds and HELOCs? * Who is responsible for maintenance? How do you insure that maintenance is being kept up to date? * Not-for-profit collaborations * How long do tenants stay in their homes? What % in your programs ultimately own their homes? What are your alternative exit strategies? * What kind of regulatory regime are you dealing with? What makes you nervous
Home Equity Debt Products
State of The Home equity
An insightful analysis will be presented of the current state of Home Equity lending, utilizing proprietary origination and servicing data sourced directly from lenders. This presentation will offer unique views on market performance from both depository institutions and non-traditional (fintech) lenders, providing attendees with a fresh perspective on the evolving competitive landscape. Attendees will gain an understanding of who is currently excelling and who is facing challenges. Additionally, expert insights into the broader economic factors impacting Home Equity lending will be shared, delivering a comprehensive overview of the industry for 2025 and beyond.
Senior Executive Home Equity Debt Strategies For Volatile Interest Rates & Equity-Rich Homeowners
* How has the increase in HEI products impacted the seconds and HELOC markets? If you can’t be them join them- Any plans to get into the HEI market? * Credit profile & scores, debt to income and LTV: Where are you with the consumer? * Refinancing vs. second liens * As interest rates remain uncertain going forward how will the consumer react? * Older boomers: Reverses vs. equity and debt cash out products * Tech innovations and AI: What applications are you using to drive down costs * How much cross-selling is being done? How much is it worth? * Bank vs. non-bank vs. credit union origination and product variances * Capital reserve levels and impact of different home equity products * What kind of non-QM are you comfortable being behind? * Investor demand for the product and where speeds are
Going Forward With Reverse Mortgages
* Will there be a shakeout in the HUD HECM market? * Servicing spotlight… What needs to be improved? * Litigation that may impact the market * Credit scores, debt-to-income, loan-to-value and other qualifiers * Motivations for choosing reverse vs. cash out product * Target homeowner after the obvious * Impact of record equity in homes * Structuring other home equity products as a bridge to reverses* As interest rates change the HECM market will…
A Deep Dive Into Closed End Second Origination & Investment
* What are your origination practices and credit box? * Origination fees and expected revenue per loan * When does it make sense to do a refi or partial refi vs. second? * Making second mortgages with below-market interest rates work * Market liquidity and how investors are looking at the trade * Over the last 2 years the share of FHA loans increased by 60%... Is there still room for growth?
A Deeper Dive Into HELOC Origination & Investments
* As a record amount of HELOCs are coming to the end of the draw period what is your strategy? * Reset risk: Comparisons vs. GFC * Using a HEI as a bridge to a HELOC * How have recent Federal Reserve cuts to short-term interest rates impacted the market and rates? How do you think additional cuts will impact? * Piggyback HELOCs, first lien HELOCs and other recent structural innovations * Does the amount of AVMs being done trouble you? How about deteriorating credit scores and rising LTV? * TILA, Fourth Circuit Court of Appeals and the new Presidential administration * What kind of new HELOC structures are out there? * Evaluating the subprime HELOC market * Has debt/income ratio or credit score target customers changed
Updating Servicing Challenges For 2nd Liens, HELOCs And Other Debt Products
* Virtual assistants, chat bots and other tech innovations you are using to increase efficiencies * Delinquencies and loss prevention difference * What is your home equity education process? * The third-party vs. in-house decision * What is happening in the first lien? How is that impacting the second lien? * Tax monitoring and property insurance * CFPB loss mit proposal and other impactful rule changes, litigation or court cases out there that are getting you nervous?
HELOC & 2nd-Lien Securitization, Liquidity & Capital Markets
* Securitizing HELOCs vs. 2nds * Fannie and Freddie CES pilot programs * Pros and cons of best-efforts correspondent vs. bulk loan sales * Implications of un-utilized HELOC draws on liquidity and pricing * Rating agency updates * Managing prepayment risk
HEI Capital Markets, Investment & Servicing
Securitization Execution For HEI Products
* Managing reclassification risk * Managing tail risk of amortized pool * REMIC vs. debt for tax * Call features of 10 vs. 30 year and reserve accounts * What does the waterfall look like? * The valuation piece * Rated vs. unrated; public vs. private securitization * Secondary market innovations * The investor perspective
HEI Servicing Challenges
* Who steps in if the homeowner can not make the payment? How about if the HEI underwriter goes south? * Keeping servicing in-house or outsourcing * What kind of fee structures are out there * Customer hand holding * What can you improve? * Compliance challengers and potential liabilities from litigation * Trial and tribulations for master, primary and backup servicers * CSFP and HEI product servicing * What are institutional buyers looking for?
HEI Product Relative Value: The Investor Panel
* What kind of home equity products do you like? Avoid? What does the HEI product need for you to invest? * IRR and risk-adjusted return hurdles * What kind of liquidity and prepayment are you comfortable with? * What do you look for in an underwriter? * What do you expect performance to look like in different interest rate and economic scenarios? * How will the investment market look in 5 years?