On Thursday, October 1, Hometap’s CEO Jeff Glass joined a virtual panel discussion as part of Lendit Fintech USA 2020, an annual conference that focuses on the top trends and innovations in the world of finance and banking. The session, called “The Hot Products in 2020: Refis, Cashouts, HELOCs, and Accessing Equity,” was moderated by Todd Kimmel of Montage Ventures and also featured Jack McCambridge, General Manager of HomeLight Home Loans and TJ Milani, Chief Financial Officer at Figure. The three panelists discussed the current home financing  landscape, the challenges and opportunities that arise with these new business models, and how they’ve pivoted and adapted during the pandemic.

Accelerating and Simplifying

While they might differ in terms of their specific functions, all of the products represented by the event’s panelists have one goal in common: to make traditionally slow and painful home finance processes faster, easier, or both. Whether it’s creating a speedier, digital HELOC through Automated Valuation Models (Figure), perfectly coordinating the sale of a home and purchase of a new one (HomeLight), or allowing homeowners to use their home’s equity to pay for necessary expenses without the hassle of a loan or monthly payments (Hometap), simplicity, transparency, and agility are at the forefront of these businesses. 

The panelists pointed to the often outdated infrastructure and practices of big banks and traditional lenders, like requiring very specific criteria for loans, as a major pain point for consumers. And frequently, physical components like appraisals can drag the process out even more. With $18–20 trillion of the country’s approximately $30 trillion in housing stock tied up in equity, there’s a huge impetus and opportunity to explore ways to access it—and then share those avenues with homeowners.

A Knowledgeable Customer Base

Despite being fairly new business models, consumers have been extraordinarily receptive and savvy when it comes to doing their homework.

“Consumers are smart,” Glass remarked. “We have the burden of educating people on what this is and how it works, but once people get involved, they ask very smart questions. They’re very thoughtful and they’re very calculating in their decisions.”

All of the panelists agreed that the biggest obstacle wasn’t explaining their product to consumers—often, it was getting them to discover the companies in the first place. 

“Everybody knows a traditional Chase or Wells Fargo mortgage. We don’t have the brand capability yet of one of those large players,” Milani admitted, pointing out that while they’ve spent a considerable amount of money on marketing, getting the word out has been a challenge. “You’re trailblazing in new markets.” 

Rising to the Challenge

COVID-19 has turned the world upside down, but overall, the real estate market remains a resilient and reliable asset class, according to Glass. In addition, necessary shifts from in-person appraisals and notarizations to digital ones have actually made some experiences even smoother; an element that will likely remain in some capacity even after the pandemic is over.

McCambridge also noted that the focus on speed and momentum has worked to the advantage of companies like his, as homeowners have been looking to make decisions and take action quickly in the face of the current crisis.

One thing that’s remained consistent is the consumer desire for honesty. For McCambridge, it’s all about maintaining and cultivating trust with a client, then giving them great options.

“This contemporary experience that shortens cycle times isn’t just better from a customer perspective,” added Milani. “The easier that is, the more trust you wind up creating—no extra things or ‘gotchas’ to worry about—which paves way for more innovative products.”