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Special Reports
Home Equity Lending
'Home Equity Can Sell Well in Tough Times'
By Bonnie Sinnock
Secured Funding's president has remained fairly optimistic about the recent
market environment even as a number of other originators have been challenged by it.
That's because the president of this Southern California-based company, Lorne
Lahodny, continues to believe that its home-equity products can be good sellers in what are tough times for first-lien
products.
"We've been very active," he said, noting that the company saw record
numbers in first quarter.
"This is a very good market for us and I think a very good market for the
broker community," the Secured Funding executive said.
Specifically, the home-equity products Secured Funding said tend to have this
countercyclical strength are those that it offers: subordinated lien loans made on properties with no more than
four units.
When other parts of the business are flagging due to a change in market cycle,
home-equity products may do just the opposite and help keep brokers active, Mr. Lahodny said.
"As production slows ... there's a lot of success [in] offering [consumers]
home-equity lines of credit," said the Secured Funding executive, noting that HELOCs have been a particular
strength of the company's of late.
"[We're] seeing a lot of positive trends on the HELOC side," he said.
Secured Funding is active in a "checkerboard" of states across the country
and is expanding, said Mr. Lahodny. He said that at press time last month the company was working on adding New
York to its market.
The company operates in three loan channels: wholesale, correspondent and retail,
Mr. Lahodny said. He said there has been a pretty healthy split between wholesale and retail to date with correspondent
possibly becoming more active in the fall into 2007.
On the wholesale side, Secured Funding has been adding loan brokers at what Mr.
Lahodny said is a "very brisk pace" numbering in the hundreds per month. He said the company positions
itself as offering "unique pieces" of a "full service product line" for brokers. Brokers "may
not completely understand all the aspects of HELOCs" but Secured Funding can help them handle the product.
"[The] demand on today's broker is greater than ever [to understand all products],"
Mr. Lahodny said, noting that this "can impact the broker's bottom line."
Moves the company has made to support its brokers include investing in an account
executive platform with an effective call routing system that ensures brokers can get their questions answered,
he said. The company also makes sure that its customer care group is available if for some reason its AEs are not,
said Mr. Lahodny. Furthermore, Secured Funding makes available to its brokers through its website an easy-to-use
prequalification engine, he said.
Mr. Lahodny added that the company often interacts with its brokers in different
ways designed to match their individual needs.
"We're different things to each one of them," he said, noting that second
liens that support piggyback loans might help bolster purchases at one broker, for example, while another broker
might look at second-lien loans as a means of contacting existing customers who can use the second-lien product
for another purpose such as debt consolidation.
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