The $283.3 million securitization was more than nine times oversubscribed.

Home equity investment securitization deal sizes increased with issuance in November and activity is expected to remain elevated in 2026 thanks to strong demand from investors.

The issuance follows a large securitization of home equity investments by Unlock Technologies and Saluda Grade.

Several states are taking a closer look at home equity investment offerings, with some courts finding that they are exploitative.

New ratings methodology and additional historical data on home equity investments should boost investor demand for the product in 2025.

The regulator said in an amicus brief Wednesday that home equity investments can be considered credit and subject to Truth in Lending Act requirements.

Home equity investment activity is growing thanks to ongoing home price appreciation and strong demand from both homeowners and investors in the secondary market. Regulation of the products is currently limited to a handful of states.

The new HEI securitization has borrowers with slightly better average credit scores compared to an issuance in April.

Morningstar DBRS created rating criteria for securitizations of home equity investments in mid-2023. Since then, issuance has blossomed, and the sky’s the limit, according to industry participants.

ABS backed by home equity investments are offering unlevered returns in the low double digits. The first rated HEI ABS was issued in October and industry players are anticipating exponential growth.