New Home Equity Loan Product Solves Homeowners' Needs

Fundings of loanDepot Home Equity Loans Nearly Double Every Month Since Launch

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Jan 06, 2016, 01:30 ET

Anthony Hsieh, loanDepot chairman and CEO

loanDepot logo.

IRVINE, Calif., Jan. 6, 2016 /PRNewswire/ -- Seven years after home values collapsed, nine out of ten homeowners today now have positive equity,¹ with many accessing their newly gained liquidity to address important needs such as home improvements, debt consolidation, education, business loans and more, according to loanDepot, America's lender.

With home price appreciation on the rise in many housing markets across the country, home equity loans nationwide increased 4.2 percent in the third quarter 2015.² Home prices are expected to moderate slightly in 2016, rising between 4.3 percent³ and 4.9 percent.⁴ An additional 5 percent in price appreciation will be enough to move another 800,000 homeowners into positive equity positions and raise the total number of homeowners with equity to 47.3 million.⁵

"In the last three years median home prices have increased by more than 15 percent⁶ and nearly 7 percent in last 12 months⁷ alone, helping millions of homeowners restore equity lost during the housing crisis," said Anthony Hsieh, chairman and CEO, loanDepot. "Based on current market trends, we expect more residential properties will continue moving into positive equity positions. This will help open up low cost liquidity to millions of newly equitized homeowners, particularly those reluctant to abandon their low fixed-rate first liens."

Introduced nationwide in September 2015, fundings of loanDepot home equity loan products have nearly doubled every month since launch, with average loan amounts on the rise ranging from approximately $40,000 to nearly $60,000. loanDepot is the first marketplace lender to offer home equity loan products to borrowers across the country, and the only marketplace lender to offer unsecured personal, home purchase, refinance, and home equity loan programs.

"A significant challenge for many homeowners today is that they don't know if their home has regained equity, and they're unclear on how to determine the value of their home," said Hsieh. "As more homeowners become aware of their improved equity positions, our data shows they'll use their recently gained equity for debt consolidation, home improvement, education, or small business needs, among other uses."

loanDepot home equity loans enable homeowners to access equity in loan amounts ranging from $25,000 to $250,000. Fixed terms are offered up to 30 years with up to 95 percent loan-to-value available for certain borrowers. Since a home equity loan is a secured debt, the interest rate is typically lower than the average rate changed on a credit card or other form of unsecured debt. Home equity loans also offer potential tax savings as interest payments may be tax deductible. There are no pre-payment penalties so borrowers can pay off principal anytime.

In addition to debt consolidation, many loanDepot home equity borrowers are putting their equity to work to meet major needs for home improvements. The Harvard Joint Center for housing Studies projects annual spending growth for home improvements will accelerate from 2.4 percent between the third-quarter of 2015 to 6.8% in the second quarter of 2016.⁸

Homeowners considering a home equity loan can easily receive information on how to obtain an estimate of their home's current value by talking to a licensed loanDepot loan officer. For more information, call 888-983-3240 or go to http://www.loandepot.com/HomeEquity

ABOUT LOANDEPOT, LLC
loanDepot, America's lender, matches borrowers through technology and high-touch customer care with the credit they need to fuel their lives. As a fast-growing national marketplace lender, the loanDepot platform is disrupting finance by dissolving the lines between mortgage and nonmortgage credit. The company has funded nearly $60 billion in loans since inception. loanDepot is passionate about emerging financial technology and dynamic product delivery supported by excellent customer service to empower consumers. Headquartered in Southern California, loanDepot employs 5,000+ people across the country including 1,500+ licensed loan officers, and operates 140+ loan stores nationwide. The company operates under the brand names loanDepot, imortgage, Mortgage Master, LDWholesale and LDEscrow. NMLS # 174457Learn more at loanDepot.com

¹ http://www.corelogic.com/about-us/news/corelogic-reports-256,000-us-properties-regained-equity-in-the-third-quarter-of-2015.aspx
²http://www.insidemortgagefinance.com/issues/imfpubs_imf/2015_48/latest_data/Home-Equity-Lending-Up-Slightly-in-3Q15--1000034855-1.html
³ http://www.freddiemac.com/finance/pdf/nov_2015_public_outlook.pdf
⁴ http://fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_121515.pdf
⁵ http://www.corelogic.com/about-us/researchtrends/homeowner-equity-report.aspx#.VnmDIL3RscM
⁶ CoreLogic – 2013, 2014 and 2015 HPI price reports - http://www.corelogic.com/research/hpi/corelogic_hpi_october_2015.pdf
http://www.corelogic.com/about-us/news/corelogic-reports-homes-prices-rose-by-5.7-percent-year-over-year-in-january-2015.aspx
http://www.corelogic.com/about-us/news/corelogic-home-price-index-rises-by-almost-10-percent-year-over-year-in-january.aspx
⁷ http://www.corelogic.com/research/hpi/corelogic_hpi_october_2015.pdf
⁸ http://www.jchs.harvard.edu/remodeling-spending-expected-accelerate-2016