Second mortgage market insights Q3 2023 finds active capital markets

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Home Equity Lending News LLC (HELN), the exclusive source of breaking news and statistics about second-mortgage lending, has published its Second Mortgage Market Insights Q3 2023. The report, sponsored by Consolidated Analytics Inc., identifies growth areas, analyzes capital markets, and finds optimism about junior-lien lending and issuance.

“The last year has been a roller coaster ride for junior-lien lending as markets were jolted by a steep ascent in rates and a regional banking crisis,” HELN CEO Sam Garcia said. “But we’re now seeing increased issuance, greater credit union participation, and more M&A activity at a time when banks have slowed their home-equity growth.”

The study was based on data and insights analyzed, collected and reported on by HELN since the Q2 report.

Some of the findings from the report include:

• HELOC volume lower, HEL business accelerating
• Six home-equity deals issued in Q2
• Two second-mortgage wholesalers launched, one acquired
• Two recent home-equity M&As
• Two home-equity credit lines issued
• Yields have soared, especially on RMBS
• Spreads between 1st and 2nd mortgage doubled
• AVMs dominated valuations, but regulators could curtail
• Ratings agencies aren’t keen on less than full documentation
• LOS expand home equity
• Midwest and home renovations offer great opportunity
• Internet searches for “home-equity” related phrases are at the highest level since at least 2004
• Several firms in home-equity sector reported C-Suite activity

“With the uptick in HELOC activity and increased scrutiny on lenders, property valuations play a pivotal role in home-equity lending,” said Chris McLain, valuations division president, Consolidated Analytics. “Several valuation products can help lenders assess the risk and equity available for borrowing. Consolidated Analytics’ experts and appraisers help ensure accurate valuations to inform decisions and maximize investment.”