Former Freddie CEO Don Layton said the pilot’s only connection to housing is that some of the homeowner’s equity is used as collateral for the new second.

Non-agency securitization involving home equity increased by 39.3% in the second quarter even as some big players pulled back. Issuers that weren’t active in the first quarter helped fill the void. (Includes two data tables.)

Supporters of the program say the expanded use of second mortgages is a less costly way for homeowners to access their home equity when interest rates are high. But they worry about the pilot’s restrictions.

It remains a challenge to finance accessory dwelling units through traditional mortgage products. A new financing option from an ADU builder looks to overcome that challenge.

Innovation and concerns are arising in the home equity lending space as home values increase.

Figure believes its new HELOC marketplace can be a “game changer” for originators.

Banks tightened underwriting standards for HELOCs in the first quarter and demand from borrowers declined. The only HEL lender among the top five to increase production in the first quarter of 2024 was a nonbank. (Includes three data tables.)

Initial partners for Figure’s new marketplace include The Loan Store, Movement Mortgage, Bayview Asset Management and Saluda Grade.

Goldman Sachs jumped into the HELOC securitization market, sourcing HELOCs from various lenders.

Goldman is a leading issuer of prime non-agency MBS and an issuer of expanded-credit deals. The firm aggregates loans from various lenders for securitization.