William Schoeffler talks about his growth strategy for 2024

A new white label offering for home-equity lines of credit is designed to address a critical gap for smaller lenders who find it challenging to profitably originate low-dollar loans. Home-equity investment products could be on the horizon for the platform.

Hitch Inc.’s new white-label Hitch Inc.’s lending platform for home-equity lines of credit has been modified to handle home-equity investment contracts, a shift reflecting the sector’s rapid expansion. Nada Inc. is the first firm to adopt the upgraded technology, aligning with broader market momentum as HEI originations more than double.

New York-based Hitch’s lending technology is already a key tool for originators handling HELOC production. In August 2024, it introduced a white-label platform designed to help lenders efficiently originate smaller-balance loans while maintaining profitability.HELOC platforWelcome to the this week’s episode of Ten Minute Talks! HW Media’s Chief Operating Officer Diego Sanchez is joined by William Schoeffler, Founder & CEO of Hitch. The pair talk about Hitch’s growth strategy for 2024, the state of the current market and the importance of leaning in during these tough times.

https://www.youtube.com/watch?v=DQho9ADNfKA

Here's the transcript with slight improvements for readability, maintaining the clear identification of speakers:

10-Minute Talks: Innovating Home Equity with William Schoeffler, CEO of Hitch

[Music]

Diego Sanchez (HousingWire): All right, coming to you live from HousingWire Annual in our brand new digital Newsroom, integrated into the event. I've got William Schoeffler, who's the CEO and founder of Hitch. William, could you just give a 30-second introduction of yourself and Hitch?

William Schoeffler (Hitch): Yep, thank you. Hitch is a digital home equity lender, so we focus on just doing HELOCs. We're a specialized lender helping homeowners tap their home equity, and we focus on basically trying to get the process down to seven days.

Diego Sanchez (HousingWire): From application. And are you enabling other lenders to provide this product, or are you direct to the end consumer?

William Schoeffler (Hitch): We are direct to consumer. We are working on some partnerships with other lenders to white-label our technology right now, but our primary customers are directly served.

Diego Sanchez (HousingWire): And what got you excited about the home equity space? You could have picked a million different areas to launch a business. Why home equity?

William Schoeffler (Hitch): Home equity is super exciting just because of the technology you can build in the space in terms of true automation. If you look at, like, we actually went to WWN headquarters over the summer—amazing campus, 8,000 people under one building. Mortgage is really human-intensive; it takes a lot of underwriters and processors. What's super exciting about HELOCs is that it's a specialty portfolio product that allows you to actually craft your own underwriting guidelines—guidelines that you can fully automate. I'd say it's more analogous to the personal loan industry, where they were able to fully leverage automation. For us, we view ourselves as the biggest competitor to unsecured personal loans and credit cards. Consumers have just gravitated towards those products because they're so easy. You connect your bank account, and the next day, boom! We want to bring that same experience but do it so consumers can get more money at lower interest rates and over longer periods of time.

Diego Sanchez (HousingWire): So why did you start with the line of credit home equity product as opposed to the other home equity products?

William Schoeffler (Hitch): The reason for HELOCs is because it's an open-end line of credit, so a lot of the traditional mortgage regulation, such as ATR, doesn't apply to it. Basically, it allows you to get the closing period down to five days, as opposed to a closed-end product, which takes you on average two weeks.

Diego Sanchez (HousingWire): We talked a little bit in our prep session about shared equity models. A lot of buzz around them. We're not sure if it's going to work or not. What's your perspective on shared equity?

William Schoeffler (Hitch): It's a super fascinating model, and I've followed a lot of the originators. Recently, the news is that Unison unlocked their first rated securitization. The industry's had a lot of fits and starts over the last 10 years, and the biggest issue has been investor demand in the space; it's waxed and waned. The hope these originators have, and they tell me, is that now that it's a rated securitization, institutional funds will actually invest. What I've learned about this space is that there's a large swath of customers who can't get HELOCs; for example, they can't qualify, maybe they have some challenged credit. These consumers are very hungry for capital, and for those consumers, it is a great product. It requires a lot of explainability, and that has been the big issue: a home option agreement is a very complicated product to understand, so you need the counsel of a loan officer. But there is a lot of consumer demand to actually tap into your equity. So I'm excited about these companies and their prospects.

Diego Sanchez (HousingWire): Right, interesting. All right, so I imagine you have a growth strategy for the rest of this year and 2024. Tell us a little bit about that growth strategy.

William Schoeffler (Hitch): Yep. The pillar for us going into 2024 is working with top originators who have a lot of consumers that they're working with for refi, and they just don't want to refi at the end of the day. We want to be that partner for these originators where they can send them to us, and we can actually help these consumers get a HELOC or HE loan. A lot of these originators don't want to offer our product just because it doesn't fit into their model; it's not profitable for them to originate. So we want to be that partner that helps fill that consumer demand and actually be able to give that consumer—

Diego Sanchez (HousingWire): William, yep, thanks so much. Great to chat with you.

William Schoeffler (Hitch): Thank you. Thank you.

[Music]m includes a loan origination system and a point-of-sale interface, while other services from other providers are embedded in the technology through a single interface, a written statement indicated.

“This iteration signals Hitch’s smooth transition from the direct-to-consumer market to a collaborative effort with independent mortgage lenders,” the fintech stated.

United Mortgage Corp., which reportedly originated more than $2 billion in purchase financing and refinances during 2023, is the inaugural client that inspired Hitch to launch the service. With the platform, the company can originate HELOCs under their brand without redirecting borrowers to external platforms.