The mortgage market may be constrained by rate lock-in, but a powerful shift is underway—home equity lending is emerging as one of the most significant growth opportunities in the industry today. As borrowers hold onto historically low first mortgage rates, they’re increasingly turning to HELOCs and home equity loans to access the wealth built in their homes. In this episode, we explore the data behind this surge, the operational and technology challenges holding lenders back, and how forward-thinking organizations are transforming their processes to deliver faster, more seamless borrower experiences. If you’re looking to stay competitive and unlock new revenue streams in today’s market, this conversation is essential listening.
[Lykken] Listeners, I’m really excited to have two mortgage professionals joining us today, both very strong in technology. We’re going to learn more about what’s going on broadly. They’re going to drill into what they’re doing now. These two have been with some of the top companies in the nation. I’m so excited to have joining with me today, David Bolin, a dear old friend who’s been with me in so many different companies throughout the years. He’s a true Chief Marketing Officer for many companies to pass well in my mind he is a Chief Marketing Officer. He’s that talent. He has always held that position but he is that kind of gifted. He is a gift for any company that can have him working on the marketing. David, it’s so good to have you joining us, friend.
[Bolin] Thanks David, good to be here, appreciate it.
[Lykken] Yeah, it’s always fun. And joining us today is John Aslanian. John, it’s so good to have you. I’ve known you for decades. You and I go back, way way back to your, we’ll have to talk a little bit about that. I really want to focus on what the two of you are doing now, but I think John, you represent, actually both of you do, represent a unique perspective on how we’ve seen technology advance over the years. So, David, let’s start with you. Let’s first of all, talk a little about about FirstClose. You guys specialize in the home equity markets. You are expanding the company dramatically,.and let’s talk about that, David, if you could give us a kind of an introduction to where we’re going to be going as it relates to FirstClose.
[Bolin] Sure, so FirstClose, we see ourselves as the authority in home equity lending solutions. The company’s been around for over 25 years, but just in our last 13, 14 months or so, we’ve seen a real inflection point. We brought in some really excellent leaders from other parts of the industry. Summit, Simple Nexus, a point of sale that has grown and expanded since its nCino acquisition. Some of us have tenure at mortgage bot, Finastra. A lot of us have spent time at Ellie Mae, Ice Mortgage Technology. But we’re really throwing some fuel on the fire that was already burning here at FirstClose. Home equity’s really had a moment in these last two, three years as interest rates have really kind of stalled out. The mortgage market seems a little, like I said, stalled. But consumers are constantly still looking for you know, financial help, whether it’s there, the consumer debt has, has risen as we’ve seen across the board, tapping into from a wealth perspective, the appreciation that’s happened within most of the property markets across the country. Now, again, regions are a little bit different, but just across the board, valuations have risen dramatically in the last few years. and same like we all know, if you feel like you’re stuck, you’ve got that 3% interest rate. You don’t want to move, but you’ve welcome somebody to the family. Maybe the older generation is moving in with you. You need to renovate. You need to access that capital, but you don’t want to move. So, these equity solutions that are really offered by your regional banks, you know, there’s some IMBs out there, the credit unions play heavily in this space and even some large national lenders. It’s really a great opportunity for these consumers to tap into that wealth that’s been created in their home ownership over the last few years. But, as we’re seeing is these processes are really slow. A lot of these institutions are treating an equity type of loan, whether it’s a line of credit or a home equity loan, like a mortgage. 30, 45 days to close, slow processes, bad technology, paper-based technology still. There’s a better way and we’ve proven that at FirstClose. So what we’ve been really trying to do in the last year since John and I started here at FirstClose is just get the name out there. We’ve got great technology. We’ve got a roster of referenceable customers that are seeing tremendous value in leveraging our solution, but people just don’t know who we are. So we’re trying to knock on all the doors, ring all the bells, talk to all the influencers that are out there like you, David, and really help us to spread the word that there is a better way and you can provide that much more value to your current customers or attract new ones or members for the sake of a credit union.
[Lykken] Yeah, I think the other thing aspect is you guys are truly experts on the home equity lending. Anything that’s in the home equity space, you guys are true experts in it. And so if a company is looking to get into the space or do it better, you can’t, you just must have a conversation with someone at FirstClose. That’s where we’re going with John. One of the things is, John, you were actually there at FirstClose first, and you got your good buddy, Dave Bolin to join you over there. Tell us about what attracted you to FirstClose.
[John] It took some strong-arming, but yeah.
[Lykken] You’ve worked, by the way, this is a true expert because you’ve worked with some of the top technology companies out there. Something about this one really captured your attention. What was it?
[John] Yeah, absolutely. So, you know, the market was stalling out in first mortgage. You know, it’s been kind of frozen over for a number of years and equity has just taken off, right? I always like to start with data. You know, home equity lending hit 311 billion last year, 2.1 million units. So it’s an increase of 60 billion, increase of 81,000 loans. So just looking at that opportunity, looking at everyone sitting there with the forever rates, right? If you wanna tap your equity, but you got the forever rate and the two or 3%, you’re not gonna move. Unless you’re forced to move, you’re never gonna move. So there’s this opportunity where I firmly believe like the equity loan is like, it’s the loan for all your needs, right? Regardless of the life event, if it’s a wedding or a car or a remodel or whatever you need to do, you always just wanna kind of have one there. So I was looking at this opportunity. I didn’t know much about FirstClose. I got to know Tim and Ted Smith. I’m like, these guys got something, right? and we just need to bring in the sales engine to make a lot of noise about it, to help the company grow.
[Lykken] Yeah. Which is, which is what you have done so successfully, John, over all the companies you’ve been at. You have been a leader at really ginning up sales. So, anyone who’s looking at, I mean, I know you’re happy there, but man, you have been very successful at making sales happen for other tech companies. Let’s talk a little bit about that market. You were giving us some really interesting statistics, John, about the opportunities. What, is this a temporary opportunity or is this one that is going to continue to grow regardless of the rate structure?
[John] Well, for a couple of reasons, there’s always gonna be the folks with the low rate, right? That’s gonna take time to work off with the 2 and 3 % rate.
[Lykken] They’re not gonna go away.
[John] They’ll slowly go away if you’re forced to move, but a lot of them, they’re just not gonna go away, right? And then new borrowers, right? First time home buyers, they’re gonna want a home equity line as well. So, it’s just one of those borrower education things. It gives us an opportunity to educate the market that a home equity line is a safe thing to have. It’s a good thing to have. Maybe a HELOC is a good thing to have, right? You I always like to throw more data out there. 87% last year were HELOCs versus HELOBs. So it’s just interesting to see, you know, where the market gravitates to. But there’s a ton of room for growth. If you look at all those loans done 80 % were done by depositories. So tons of room to grow for the IMBs, right?
[Lykken] Yeah, why do you think that is, John? I mean, when you look at this, has been the home equity side has been dominated largely by the credit unions. Some of the banks have gotten in there, but this is a real blue ocean opportunity for IMBs to get involved in this. Why haven’t they, do you think?
[John] I think it’s a cycle thing. When the rates go up, they get into HELOCs and focus more energy on it. And then when the refi has come back, it’s like, all right, we’re done with that. We’re just going to focus on the refinances. That’s my take. But yeah, there’s opportunity for lenders to take market share right now.
[Lykken] Yeah, it really is. It’s a real opportunity and people are that and lenders that are listening to us, whether you’re a loan originator or running a mortgage company, you need to pay attention to this because it’s a wonderful income opportunity for you, especially in these times and I think it’s one that should never be forgotten about and always made aware of. When you look at some of the opportunities that are out there, you’ve already talked about the major resurgence that resurgence that you’re seeing across the lenders. And you kind of touched on some of those moments. One of them is the operational components. David, you touched on this operationally. A lot of companies don’t do it well, or if they did into it, others are doing it better, like credit union. So I think it’s a, it’s a real opportunity. David speak to that please. And John help opine it.
[Bolin] Yeah, sure. I mean, we always talk about, know, especially when you’re doing some level of digital transformation, it’s not just a technology play. It’s marrying technology with people and processes to make everything as streamlined as possible. We’re not about getting people out of the system. We’re just about taking those people and getting them into the best, highest value use of their time so that we may be automating some systems. but you’re getting those folks back out of the back office, more forward-facing, working with members, working with customers, more sales-driven potentially. So there really has to be bit of a mindset shift in terms of do we want to do this? Do we want to do this properly? We obviously make sure everything is secure, we’re following all the regulations, helping you get through all your audits and everything. if you’re technology forward, if you want to have an excellent experience for your potential borrowers, your members, new customers coming in the door, you really need to think about it from an end-to-end perspective. How do we take that application in as quickly and fast and securely as possible? How do we then apply as many of those constraints from our underwriting perspective early on so that we bounce people out that don’t qualify? as soon as possible, so not waste time or dollars on them. And those that do fit those certain criteria, how do we make sure we collect all those bits of information we need as quickly and as cheaply as possible so that we can get that full package approved, decisioned, and out the door for signatures and then getting those loans funded as quickly as possible? Again, we’ve seen customers or prospects have come in, they’re doing these things, average 45, 50 days to close one loan. And we’re able to turn that around. Some people, I mean, can do it as quickly as five, six, seven days. You know, two weeks is about, honestly, from my perspective, like if we can get you down to two weeks, I mean, that is just a massive turn time and we know these consumers, they have at their fingertips a dozen other potential lenders that are in their pocket shooting them emails. I mean, how many times a day do we all get opportunities to either refinance? take out a home equity loan, auto loans. Everybody’s looking for all these types of people that are in that market. So you’ve got to have a streamlined system that keeps their interest and accelerates and gets them that opportunity to also provide that information as quickly as possible. Because once you get them on the hook, if you’ve got a great experience, typically they’re going to follow through with that application all the way through the end and then close that loan.
[John] David touched on it too. Like we just see lot of lenders have legacy technology holding them back. David briefly touched on it. Like they don’t have a way for the borrower to self-serve and quickly see, I qualify for a HELOC or not? So then the LO gets all these applications that are never going to get approved. They’re wasting all this time. We live in an Amazon world. I click a button, I get the product at my door tonight and consumer preferences demand that kind of experience. And if you don’t give it to them, they’re going to go across the street.
[Lykken] So John, you’ve been at this for a long time. What’s holding some of these lenders back from getting and taking on the latest technology to do what’s necessary to compete effectively?
[John] Yeah, think a lot of its legacy technology, right, hasn’t been a priority. Some of them operate in consumer lending platforms, which are great, but they aren’t focused on real estate. So they may not even have the integrations for title, for evaluation, for all the key things you got to do in our glorious industry. So that becomes a real challenge, right? We’ll see banks that come to us and they have their home equity department working out of the core, the Jack Henry is not going to have a title integration or all these key integrations that we’re living with. So we can help them in all those different scenarios.
[Lykken] Yeah, and by the way, for our listeners not familiar with Jack Henry is that’s a leading banking platform that runs the depository side of the business, many aspects of the business. So, but it’s really a great point on that. I’m just trying to help educate John’s over our regular listeners that are in the IMB world. You know, John, one of the biggest friction areas that we’re seeing out there is we hear about vendor coordination and order management. Where do lenders typically struggle the most and how does automation change the game?
[John] Yeah, it’s a good question. like to say, you know, home equity lending is very nuanced. Lenders are like snowflakes. So credit union A is going to create their own loan programs, right? They’re keeping these loans on the books versus credit union B. There’s no like master template like a Fannie and Freddie loan. So they’re all creating their own programs. They all have different requirements of what services need to be run or not run based on the loan amount and the location and all these other factors, right? And they’re doing that stuff manually, right? You may not have the integration. So then you’re You know, in your desk, swiveling your chair, keying it over here, keying it over there, bringing the data back and bringing the documents back. It’s just a compliance nightmare. It’s a duplicate work. It leads to errors, right? That’s where they’re getting hung up and we can solve that for them, right? 25 years of equity experience. We know who’s fast in what geography we deploy the right vendors at the right time based on our vendor panel for the maximum speed and automation. So that’s what we bring to the table.
[Lykken] Yeah, I think it’s one of the things is speeded service and meeting consumer expectations. You bring up a great point. We’re in the Amazon world, press a button, it’s delivered that afternoon or first thing tomorrow morning. It’s just such a important point that we have to make sure everyone’s up to speed. I think that’s one of the things that FirstClose does. And one of the things that you guys do is the way you approach integrations, especially with systems like Encompass and Meridian without forcing lenders to rip and replace. Talk a little about that, John.
[John] Yeah, for sure. We like to say we don’t make the LOS, we just make the LOS better, right? Our partners are a critical component of our success. We work hand in hand with our partners in Compass, Meridian Link. There’s another one out there, Temenos, we work really well with. We just make, we give them a premium equity experience. We sit on top of the LOS, right? So it gives their borrowers a better experience and then gives their middle to back office facts.
[Lykken] Yeah. When you say you sit on top of them, explain a little bit more, give a little more construct for that, John, when you say you sit on top of them.
[John] Yeah, we sit on top of the LOS. So we’ll give the borrowers a front end experience where they can apply and fulfill all their conditions, right? But it doesn’t replace what the LOS already delivers. And the same token for the back office staff, instead of ordering manually, they can order through our platform, which is connected to the LOS, right? And it’ll bring all the data and documents back into the system of record, which is Encompass or Meridian Link or Temano. So that’s how we help them. It means the implementations go really quick. The data flows back and forth, writes minimal IT lift. So those are all positives.
[Lykken] Yeah. And we talked a little bit earlier about, you know, borrowers expect speed, transparency, digital experiences and if lenders that can deliver that are going to have a decided advantage and the home equity area has already some expectation. Consumers have expectations because of what they’re hearing about from credit unions. Talk about how you can help, like IMBs or even those that are not lenders that are like credit unions or banks that are not yet in the home equity space.
[John] Yeah, absolutely. So if a bank’s looking to get into home equity, we’re a great vendor to partner up with, sit on top of your current LOS, or just make their current process go faster. It’s really just about consumer preferences, borrower preferences, Lenders need to deploy the experiences based on their lender preferences. If the borrower wants to upload conditions or documents from their mobile phones, give them that option, right? If they want to apply online, but come sign documents in the branch, it’s not the fastest option. Give them that option and educate them, right? Keep educating them. What is the fastest option? So we bring all those tools to the forefront for our customers so they can decide, here’s what I want to deploy for the specific borrowers we serve.
[Lykken] Yeah. You know, technology alone doesn’t transform lending. It’s people and culture that does it. How does FirstClose culture help attract top talent? I mean, we’re trying to get top talent today and you guys have a unique way of helping in AD in that. How does this work and what’s the mindset you show for a long-term commitment to deepen the integrations with a compass, for example?
[John] Yeah, absolutely. I think it starts with a commitment from our founders, Tim, Ted, and Corey Smith. know, their commitment to continuous innovation and growth, also commitment to the employees of FirstClose. They do a really good job of taking good care of us. So with that mindset, you know, on a platform that works really, really well, it makes it easy for us to recruit top talent. You know, for my org, David and our org, you know, we brought in over 20 folks last year. A lot of us came from ICE, Encompass, nCino, Simple Nexus, Data Track. A lot of us have worked together, two and three companies, and we like building software companies together. So that makes it easy. There’s a huge opportunity for us with Encompass and our relationships we’ve built over the years over there. So yeah, a lot of room to grow.
[Lykken] Kudos to the founders for recognizing the value of what you and David bring to it and then the people and allowing you to bring in the top talent from other companies to really make their dream realized in a bigger and it’s a competitive landscape. How would you describe the market right now, John, from your perspective? What do you see?
[John] Competitive landscape, yeah, there’s a couple players that do what we do. And I’d say our technology is superior to them and then the different LOSs have HELOC options, but it’s not like a premium service, right? I think what we bring to the table with the pre-approval, pre-qualification workflow, we could put in 10 fields and get offers and then decide if you want to apply, right? Instead of creating a username and password and all that stuff, and then making me fill out all the fields, let me check my value. Let me get some offers. And we can do that for the borrower before they decide to apply. So that really helps the lender sass out the bad applicants that aren’t going to fund, right, and get them into a drip campaign on how to make their credit better or whatever it is. But it really helps the lender focus on the qualified applications.
[Lykken] The sales cycle is one that’s always been a challenge out there, but anyone that’s looking to get in the home equity space, you couldn’t find a better partner who has extensive experience, shorten that pain period of trying to get in and get up and running. Then the team at FirstClose folks, you just, I mean, you know what it’s like having, it’s like having a caddy out there. If you’re going out to golf, have a good caddy with you. make such a difference in your game. I don’t remember making any difference in my game. Bowling’s a much better golfer than I am. How are you, John? You, I mean, you.
[John] I’d love to play golf. Yes, golf’s great.
[Lykken] Well, I love playing it, but I don’t have my brother got all the golf. Geez. You guys are. Well, I’m really excited about.
[John] David’s really good at golf, yes.
[Lykken] Yeah, Bolin plays a lot more. Well, he’s got more of the temperament for I don’t know if he has any time to do it, but with all that you guys are doing, it’s a really exciting opportunity. And let’s talk a little bit about the team that you put together there, John. It is an impressive group. I got to speak to your sales rally, your sales meeting that you had here in Austin, by the way, listeners, the company is based in Austin, Texas, my the state and the town that I lived in for last, gosh 17, 18 years and moved on to Knoxville here, but I love that city. I love the people there, but you’ve really brought in some top talent. Talk about that John.
[John] Yeah, absolutely. I mean, we mentioned David, right? He has a great background scaling, growing companies like Simple Nexus. We’ve worked together. Optimal Blue, Andrea Lightfoot who comes out of United Bank. She’s running delivery for us, right? She’s pre-sales, she’s delivery. She’s everything, right? She’s everywhere, very, very vocal. Just brings us instant credibility when we’re talking to a potential customer about what this project’s gonna look like and her team’s got their back, right? We’re not gonna let them fail. Tracy Farber, right? Tracy and I started in the technology world, data track together. She had a great career at ICE doing product enterprise implementations, enterprise solutions engineering. She’s got a fan base in the industry. We’ll go out to demos and is this Tracy Farber? Did you implement me 14 years ago on Encompass? It’s like that kind of level of skill. We’ve got Prachi Gidia who’s running sales ops for us. So it’s just proven salespeople and proven folks that have done this before that we’re bringing to FirstClose.
[Lykken] Yeah. Yeah. Kudos to Tim and the team, the founders for making the big decision, big commitment, quite frankly, to bring you guys in. I’m really excited about the future. Bolin, you’re going to have, you and I are going to do another podcast here pretty soon. I’m really looking forward to that one. Should be a lot of fun, new insights. I got a million questions for you about marketing and how that world is changing. John, you have performed consistently everywhere you’ve gone and I really have some high expectations for you here and it’s so good to sit down and talk to you. I knew you back in the early, early days of Datatrack. I mean, we could go on and we go back a long, long ways. It’s good. It’s been a wild ride. It’s great to reconnect with.
[John] Early 2000s, yeah, man, it’s been a wild ride. You’re teaching me the industry back then. Thanks for having us on today.
[Lykken] Yeah, it’s so good to be reconnected with you, John. And of course, David, looking forward to our partnership. We’re thrilled to have you as a sponsor now the podcast, and really getting integrated with you and your efforts. So folks, if you want to ask me any questions about this company, give me a call and I’ve spent time with these guys, but you do really want to talk to John and his team when it comes to looking at sales and how to do home equity lending better, faster, and quite frankly, cheaper. You can’t think of a better folks and talking to the folks of FirstClose. Thanks guys for being here. Really appreciate it.
[Bolin] Thanks David. Appreciate it.
[John] Thanks, David.
