ING has now launched a charm offensive focused on addressing any consumer – and, indeed, broker – concerns around HELOCs, expected to formally hit the channel in the first quarter.
“Despite their bad rap, HELOCs, used as intended, can help,” said ING Direct CEO Peter Aceto in a tweet Monday, referencing criticism about the potential for consumer abuses with those lines of credit.
The tweet is one of several over the last few weeks and linking to ING articles explaining the new HELOC, introduced to the market late last year. While the product is being beta tested with a select number of brokers, it is expected to get launched across the channel within weeks. It is already available to the lender’s retail clients.
“We’ve heard countless examples of how HELOCs are sold irresponsibly by financial institutions – where they essentially push more credit on people than is required, requested, or that they can afford,” writes Aceto in the article linked to Monday’s tweet. “On the other side of the coin are some people who have misused HELOCs, essentially treating their homes as ATMs to finance depreciating assets like big screen TVs, cars and even their purchases at the Beer Store versus home renovations or unexpected repairs.”
ING has, in fact, designed its HELOC to mitigate if not avoid all of those abuses, said Aceto.
Its HELOC is not linked to an ATM card, “which means it requires a sober second thought to access the credit and makes it less accessible for non-essential purposes,” he writes. “Our staff won’t be incented to provide more credit than is needed or requested. We’re helping clients set up a regular fixed payment plan up front so that they can pay it off faster, and not get trapped into making only minimum payments.”
Still, brokers have expressed their own concerns around the collateral charge aspect of those lines of credits as well as the lender’s move to register all its mortgages under that model.
That hasn’t limited interest, with brokers involved in the beta testing of the ING HELOC using it as a way of broadening their business as new purchases slow.