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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 38 May 2024 F E A T U R E S T O R Y F DR once called a home "the safest investment in the world." And while this theory has been challenged from time to time, over the long-term, it has generally remained true. The problem? It is not always easy for homeowners to use their home as an invest- ment—especially those who are struggling financially. While home equity lines and HELOCs are commonly used for emergen- cy expenses and debt consolidation, these products still require homeowners to meet certain lending criteria—plus they increase a homeowner's overall debt. Enter the housing market's latest star– home equity investment (HEI) products. Available in different shapes and sizes, HEIs allow homeowners to access the equity in their properties without having to take on another loan. But for these products to realize their full potential, it's going to take the expertise and resources of multiple industry stakeholders. Why the Surge? A n HEI, often referred to as equity sharing, is a financial arrangement in which a homeowner can access the equity in their homes in exchange for a por- tion of their home's future appreciation. Instead of borrowing against their home and incurring more debt, a homeowner receives a lump-sum payment upfront, and the settlement occurs when the home is sold or the agreement term ends, and the best part … there are no monthly payments. The market for HEIs is experiencing remarkable growth, reflecting a shift in how homeowners, originators, and investors view and utilize property equity. According to some estimates, the HEI market is believed to be around $2 to $3 billion annually, with the industry's first HEI securitization last year paving the way for future growth. The growing popularity of HEIs can be attributed to several factors. First, it is a debt-free solution to access home equity, which is particularly appealing in an inflationary climate where many home- owners are looking to minimize their financial burdens. This aspect is especial- ly attractive to current homeowners who may have a less than ideal credit score, and want to avoid the monthly payments that come with traditional financing. The simplicity and accessibility of HEIs are factors as well. By bypassing the traditional loan criteria, homeowners find that HEIs are a much faster, straight- forward path to leveraging their most significant asset—their home. Recent fintech innovations have also made HEIs more accessible and user-friendly, thereby broadening their appeal. However, current economic and hous- ing market trends are probably the biggest IN A CHALLENGING MARKET, HOME EQUITY INVESTMENTS OWN THE SPOTLIGHT Home equity investment (HEI) product offerings are growing in popularity for emergency expenses and debt consolidation, but in order for these products to realize their full potential, it will take the expertise and resources of multiple industry stakeholders. B y A L L E N P R I C E A L L E N P R I C E , SVP at BSI Financial, is a mortgage industry veteran with more than 20 years of experience in the primary and secondary markets. At BSI, Allen focuses on loan subservicing, QC, and mortgage servicing rights (MSR) acquisitions. Prior to BSI, he oversaw sales and strategy as SVP at RoundPoint Financial Group. Allen's background includes SVP at ServiceLink's capital markets group and as SVP at Nationstar Mortgage, where he led Nationstar's MSR and subservicing acquisitions. Earlier in his career, Allen was a senior risk executive for BBVA's residential mortgage portfolio and an SVP of Global Structured Finance and RMBS Trading at Bank of America. Prior to that, Allen was Senior Manager at Fannie Mae for nearly seven years.