Nonbank lenders are offering new HELOC options for homeowners who are self-employed or are looking to tap equity in their investor and second-home properties.

Originations of home equity loans declined in the fourth quarter as interest rates increased. Though HELOCs still dominate home equity production, closed-end second liens gained share in 2023. (Includes three data tables.)

The HELOC program will use 12 or 24 months of bank statements for income verification.

Angel Oak executives believe home equity products for self-employed and non-QM borrowers could be a growth area for brokers this year.

Nonbanks are fueling securitization of home-equity lines-of-credit, closed-end second liens and home equity investments. Issuance jumped in 2023 as refi business dried up. (Includes two data tables.)

NQM Funding updates DSCR product requirements; Truss Financial Group debuts no tax return HELOC product; Academy Mortgage launches DSCR offering; Angel Oak issues non-agency MBS that leverages blockchain technology.

More nonbanks are ready to take the HELOC plunge, using the MBS market as leverage. Among them: Homebridge and Angel Oak.

Originations of home equity lines of credit and closed-end second liens declined somewhat in the third quarter. Home price appreciation was offset by rising interest rates. (Includes three data tables.)

CoreLogic expects home equity lending to increase next year following a lull in HELOC originations this year.

Figure is expected to issue its third HELOC MBS of 2023 and will provide loans to an upcoming Saluda Grade issuance.