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Article: Big lenders turn to home-equity loans; the 50% jump in securities backed by such loans in '95 reflects the growing presence of large lenders, some seeking an offset to first-mortgage cycles.
- Article from:
- American Banker
- Article date:
- April 11, 1996
- Author:
CopyrightCOPYRIGHT 1996 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Reeling from the sudden contraction of the mortgage market in 1994, large mortgage companies have turned to home-equity loans in a big way.
One indicator of their growing presence has been the rise in securities backed by home equity loans. According to Merrill Lynch, home equity securitizations jumped to $15 billion in 1995, a 50% spurt over 1994.
Much of the new lending has been to borrowers with dented credit - often to people who owned their homes outright but wanted to cash out on some of their home equity. The market for borrowers with good credit is dominated by big banks - led by Bank of America - and is hard to break into.
The new players, ...