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The product has been good for LOs as well, Bridges noted: “It’s allowed our loan officers to stay at capacity and keep busy,” he said. “If we didn’t have a second mortgage product, it would be a much harder market for us.”
Products emerge as America’s debt load tops $1 trillion
In another sign of the times, the product has emerged at a time of record-setting consumer debt. According to the New York Federal Reserve Bank, balances surpassed $1 trillion for the first time with credit card balances rising by $45 billion to $1.03 trillion during the second quarter.
“It’s the first time in history Americans’ debt load has been that high, and that’s non-mortgage. So yeah, we’re in an inflationary market and customers of equity can improve their cash flow, certainly if they’re consolidating debt.”
Asked for a baseline attesting to the closed-end second product’s success, Bridges offered: “We have locked since inception north of $750 million.”
Another advantage to the product is that the time element for repayment is at the discretion of the consumer, he noted. “It’s not a HELOC, like I said, it’s a lump sum distribution. HELOCs work for some people. We don’t offer HELOCs. We do like the home equity loan versus the HELOC because it’s a fully amortized debt. HELOC is sort of an open-ended piece of credit – it doesn’t fully amortize. We have terms for 10, 15, 20 and 30 years, so the consumer can choose their payback timeframe – if they want a lower payment, they can have a longer period; if they want a higher payment and want to pay it off more quickly, they can choose a minimum term of 10 years.”
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