Dive Brief:
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BBVA USA is partnering with consumer loan marketplace Prosper to offer a home equity line of credit (HELOC) through its website, the U.S. subsidiary of the Madrid-based bank announced Tuesday.
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Through the partnership, BBVA said it is the first bank partner to use Prosper's technology as part of its own website. BBVA customers have been using the digital application for over a year through Prosper's website with BBVA as its exclusive bank partner in Alabama, Texas, Florida, New Mexico, Colorado and Arizona, the companies said.
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BBVA said early results indicate the digital solution is helping the bank close HELOCs 14 days faster on average when compared to its own turn times on applications submitted in other channels.
Dive Insight:
"Consumer spending on home improvement has risen over the past six months as people spend more time at home during the pandemic," David Kimball, CEO of San Francisco-based Prosper, said in a statement. "A home equity line of credit is a great option for financing a large project as it offers flexibility and access to low rates."
BBVA officially launched the Prosper-powered HELOC application in early September, said Murat Kalkan, BBVA USA's head of mortgage banking.
"We've seen a significant improvement in the number of customers who complete the online application, underscoring the power of technology to improve the customer experience," Kalkan said.
The companies said the online application can be completed in minutes, and the platform allows customers to upload documents electronically without having to visit a branch.
Customers also have access to a dedicated client services team that can answer questions about HELOCs.
BBVA's new platform comes as some institutions — Wells Fargo, for example — have temporarily stopped accepting HELOC applications because of the coronavirus pandemic, Greg McBride, Bankrate's chief financial analyst, said in a report last week.
"Lenders aren't eager to be in a second lien position at a time when unemployment is high and delinquencies and defaults are poised to rise," McBride said. "Post-financial crisis, a lot of HELOCs were complete write-offs because the value of the home had fallen and there was no margin of safety. Home equity lenders' memories of that remain fresh."
Kalkan said BBVA's decision to offer HELOCs in the current economic environment illustrates the bank's dedication to its customers.
"[I]n a time where banks are increasingly pulling back on their HELOC offerings, for us to come together and make it available more broadly, more conveniently and more efficiently says something about our commitment to customers and their needs," he said.
