FirstClose Blog

As we close the chapter on another year and begin 2025, it’s the perfect time to reflect on an incredible year for FirstClose and the home equity market as a whole. This year has been one of growth, innovation and strategic advancements, cementing our position as a leader in home equity solutions. From groundbreaking partnerships to remarkable milestones, let’s recap the highlights of 2024 and take a glimpse into what’s ahead in 2025.

2024 FirstClose Milestones & Achievements:

• New Clients: This year, FirstClose proudly partnered with several key financial institutions, including top-tier credit unions and regional banks to enhance their home equity lending capabilities. By integrating our cutting-edge technology into their workflows, these institutions have streamlined their processes, reduced costs and delivered better experiences for their borrowers.
• Enhanced Partnerships: In 2024 we significantly strengthened our partnerships with key industry tech players. In Q1 we completed the API integration of our FirstClose Equity Ordering module within Encompass® by ICE Mortgage Technology® and successfully onboarded six pilot customers who are already seeing significant improvements, not just from time to close but from the overall processor experience. The Order Management module coupled with our existing Digital Loan Application/Inquiry and Borrower Portal already available within Encompass completes the best in market end-to-end home equity solution.

We also spent a good portion of 2024 preparing to release the new Order Management solution to our other integration partners, including MeridianLink®. We are excited to launch our pilot of the new solution to MeridianLink customers in June of 2025.

• Tech Innovations: We launched major updates and enhancements to the FirstClose platform this year, including the new Digital Loan Product Wizard. The new feature in the FirstClose Equity platform that provides a guided, digital experience to help consumers see precisely how much they could save each month by consolidating their current higher interest rate debt with HELOC or a closed-end second. The new debt consolidation feature lets consumers get a real sense of what they could save by paying off higher interest debt and do it on a self-serve, no pressure basis. Clients have seen a lift of more than 10% terms of conversion.
• Liquidity Network: In the first half of 2024, we partnered with leading bank, secondary market and exchange players to create the Partner Liquidity Network, a new liquidity network to provide greater financial efficiency for lenders in the home equity market. The Partner Liquidity Network provides warehouse lines to joint non-bank clients, such as mortgage banks and fintechs moving into the home equity space as well as offer takeout for home equity assets for both depository and non-bank lenders.

The Home Equity Market in 2024 & What’s on the Horizon for 2025
Home equity continued to be the one of the hot conversations in the market this year. Although our industry finally saw two rate cuts from the Fed in the second half of the year in September and December, mortgage interest rates didn’t drop as drastically as everyone had hoped. In 2024 home equity lending continued to grow driven by rising home values and consumers leveraging their equity for renovations, debt consolidation and other financial needs.

At the end of 2024:

• U.S. homeowners collectively held $17.2 trillion in equity, $11.2 trillion which is tappable as of Q3 2024.
• The average homeowner with a mortgage now has about $207k of tappable equity.
• Q3 2024 withdrawals hit a two-year high—both collectively and individually among second lien products.
• Home equity loan originations grew by 15%, reflecting strong demand for flexible financing options.
• HELOC originations surged, with a notable uptick among Gen X and Baby Boomer borrowers who utilized equity to fund retirement goals and home improvements.

The momentum in the home equity market shows no sign of slowing. Industry experts expect home equity lending to continue its upward momentum. A report from KBRA indicates that home equity origination for both HELs and HELOCs is expected to reach $16 billion in 2025. At FirstClose, we’re excited to embrace these trends and continue delivering solutions that empower lenders to excel in this evolving market. In 2025, we’re planning to expand/enhance our product suite even more, invest in more partnerships and introduce new features designed to further simplify and enhance the home equity lending process.

Here’s to continued success and innovation in 2025. Stay tuned for exciting announcements and updates as we build on the momentum of this incredible year.