International Document Services, Inc. [1] (IDS), a Utah-based mortgage document preparation vendor, reported a spike in home equity lines of credit (HELOCs) through the year's first three quarters.
Based on document volume data, IDS says its customers have already drawn more HELOC loan docs than they did through the entirety of 2013, putting this year on track for a 65 percent annual increase if trends keep up.
The increase comes even as other loan types hold steady. According to IDS' data, conventional and Federal Housing Administration loan document draws year-to-date have increased nearly 5 percent over last year's first three quarters, while Veterans Affairs and rural loan doc draws are up around 10 and 17 percent, respectively.
“During a time of declining volumes industry-wide, IDS has seen the exact opposite,” said IDS EVP Mark Mackey. “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. At IDS, we strive to make docs the least stressful part of the lending cycle, and we're thrilled to be able to assist in our customers' successes.”
What's true for IDS' customers seems to be true for the industry as a whole. According to a recent article in the Los Angeles Times [2], homeowners opened $120 billion in new HELOCs in the 12 months ending in August, marking a 27 percent increase in volume.
“Rising home prices have certainly encouraged borrowers to tap into their homes' equity,” Mackey said. “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.”