Second Lien Market Poised for Growth

While 2002 "by most measures" was "the strongest year for housing on record," according to a Harvard University report, going forward, second mortgages are expected to steal the show in mortgage finance.

A Harvard University Joint Center for Housing Studies report, "The State of the Nation's Housing," released at the Ford headquarters here, also found that residential investment, home sales, homeownership rates, aggregate home equity and total mortgage debt "all hit new highs" in 2002.

For example, cash-out refinancing generated back into the economy an estimated $97 billion from home equity, with another $70 billion going towards the payoff of higher-cost second mortgages. Most importantly for the industry, according to the Joint Center for Housing Studies executive director Eric S. Belsky, due to the enormous amount of wealth currently stored in housing, its role "as an anchor for the economy" will continue in the future in a way it had not in the past.

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