I recently joined The Chrisman Commentary Podcast to talk about what’s driving home equity growth and what separates the lenders capturing it from those leaving volume on the table. Here are the key takeaways:
1. The opportunity is significant.
According to the June 2026 ICE Mortgage Monitor, homeowners withdrew an estimated $47 billion in equity in Q1 2026, the highest first-quarter total since 2021. Second-lien volume reached its strongest first-quarter pace in nearly 20 years, driven by borrowers who want access to capital without surrendering the low-rate first mortgage they locked in years ago. An estimated 3.9 million homeowners who took out primary mortgages between 2020 and 2022 now also carry a second lien.
2. Demand isn’t the problem. Execution is.
Pull-through rates in home equity sit below 50%, and origination costs have climbed to roughly $4,600 per loan. The root cause is that most lenders have digitized the front end of the process, but nothing has changed behind the scenes. Even though the application experience looks clean and modern, the back end is still powered by emails, phone calls and manual vendor coordination, with long stretches where the borrower has no idea what’s happening.
Until you fix that underlying structure, you don’t really have a digital experience. You just have a digital intake form.
Part of the challenge is structural: home equity products, as a group, don’t cleanly fit into any one lending department at most institutions. HELOCs follow consumer lending conventions, while closed-end seconds are subject to mortgage regulations. The result is inherited complexity from both sides without dedicated infrastructure to handle either efficiently.
3. Speed is a differentiator.
When cycle times run 40 to 45 days, loans fall out. When lenders compress that to 10 to 15 days, pull-through improves and funded volume increases. The lenders driving that compression are automating order management for valuations, title, flood and closing coordination through a centralized workflow, rather than managing it manually across email threads and vendor portals.
Using FirstClose’s Order Management Services, lenders have reduced manual processing by approximately 85% and compressed turn times to under two weeks. FirstClose is introducing AI capabilities to help lenders identify where a loan is stalling and what action is needed next, further reducing manual decision-making that slows origination.
4. But speed alone isn’t enough.
Today’s borrowers arrive with high expectations shaped by the best digital experiences they’ve had across every industry, not just financial services. XpressEquity, FirstClose’s point-of-sale platform, addresses that directly: borrowers get a home valuation, available equity, loan options and a pre-approval decision in five to seven minutes, with no SSN required. A branded borrower portal then keeps them informed from application through closing, with document upload, e-disclosures and clear to-do items throughout. For lenders, it’s a way to meet modern expectations without rebuilding their entire tech stack.
Listen to the full Chrisman Commentary episode for my full breakdown, or reach out to our team to talk through what a modernized home equity workflow could look like for your institution.
About the Author
Dan Kellett
Chief Technology Officer
Dan oversees the company’s IT and strategy spanning applications, data, cybersecurity, and infrastructure. He brings a wealth of experience delivering new products with next-gen technologies and running highly efficient and successful technology teams. Kellett is also a Certified Information Systems Security Professional (CISSP) and holds a certification with the International Information System Security Certification Consortium (ISC²).