Home Equity Protection Program
Home equity originations are up nearly 25% year-over-year, and HFS’s Equity Protection Program (EPP) lets community banks and credit unions capture this growth by expanding their credit parameters — broader CLTV ratios, wider credit score bands, higher DTI thresholds — without taking that additional risk onto the balance sheet.
How the Equity Protection Program Works
EPP is a fully insured portfolio program backed by AM Best-rated carriers. Lenders expand their internal underwriting guidelines and report monthly on insured loans. The program is fully delegated up to $250,000 per loan, with no implementation fees, no monthly minimums, and no MSA or SOW to negotiate.
If a covered loan defaults, HFS’s claims process allows lenders to recover losses up to 100% of the outstanding balance, in most cases without foreclosure or REO management.
What EPP Does for Your Institution
Expand Approval Opportunities
Broaden credit score bands, increase CLTV ratios above 80%, and approve more borrowers without adding balance sheet exposure.
Eliminate Foreclosure and REO Costs
Covered defaults are resolved through HFS’s claims process, not the courts. Lenders recover the outstanding balance without managing distressed properties.
Reduce Reserve Requirements
Because default risk transfers to the program, institutions can reduce the loss reserves tied to the covered portion of their portfolio.
Compete With Fintech Speed
No barriers to entry means lenders can activate the program and begin approving expanded-criteria loans quickly — without waiting on technology builds or vendor negotiations.
Gaining a Competitive Edge
In a competitive market landscape, having access to a reliable and robust Home Equity Protection Program can provide financial institutions with a significant competitive advantage. EPP Applies Across the Full Range of Home Equity Products:
- HELOCS
- Closed-End Second Mortgages
- Home Improvement Loans (secured and unsecured)
- Purchase-Money Seconds
What are the Benefits of a Home Equity Protection Program?
One of the key advantages of our HEPP is the streamlined claims process in the event of default. Unlike traditional foreclosure proceedings, our program simplifies the claims process, providing financial institutions with a swift and efficient resolution mechanism.
What Loan Types are Covered by a Home Equity Protection Program?
Our HEPP covers a range of loan types, including:
Home Improvement loans
Closed-End Seconds
Home Equity Lines of Credit (HELOCs)
Purchase-Money Seconds
This diversity ensures that financial institutions can cater to the various needs of their customer base while safeguarding their interests.
How Does a Home Equity Protection Program Work?
An Equity Protection Program (EPP) is designed to expand the loan options available to borrowers while mitigating risks for lenders.
By leveraging fully insured portfolio programs, EPPs allow lenders to extend home equity products with augmented loan-to-value thresholds, debt-to-income ratios, and credit score ranges.
This expansion of offerings enables financial institutions to meet the diverse needs of their clientele without exposing themselves to undue risk.
How Can Lenders Expand The Credit Buy Box Safely?
Risk transfer. HUB Financial Services’ Home Equity Protection Program (EPP) allows lenders to expand lending eligibility while transferring a portion of risk off the balance sheet. It gives institutions the flexibility to approve more loans without compromising credit quality or profitability.
How Does Risk Transfer Work?
EPP is a fully insured portfolio program backed by AM Best-rated carriers.
If a covered loan defaults, HUB’s streamlined claims process allows lenders to recover losses up to 100% of the outstanding balance, often eliminating the need for foreclosure or REO management. This protects lenders’ portfolios while reducing administrative burden and loss reserves.
Is the Program Difficult or Expensive to Implement?
Not at all. This insured program is fully delegated up to $250K with each insured lender having custom-tailored parameters that comes with no implementation fees, no monthly minimums, and no cost to the institution. Premiums are built into loan pricing, so lenders maintain full control over usage and program scope. HUB’s team manages setup and training to ensure a smooth rollout.
Since this is a delegated program, there are no barriers to entry, meaning no MSA or SOW to negotiate. Simple to implement as lenders simply expand their internal loan underwriting guidelines and report monthly on insured loans from a billing perspective.
At HUB Financial Services, we pride ourselves on offering competitive and easily managed Equity Protection Programs. By working with reputable carriers boasting an AM Best “A” rating, we ensure the integrity and stability of the programs we administer. Additionally, our team assists in establishing robust credit underwriting criteria tailored to each institution’s requirements, further enhancing risk management protocols.
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