Home Equity Lines of Credit (HELOCs)

Home Equity Lines of Credit (HELOCs) are experiencing a resurgence due to both homeowners having trillions in tappable equity as well as many being locked into low-rate mortgages. Borrowers are seeking liquidity without refinancing. Banks and independent mortgage lenders are responding to this by expanding HELOC products, increasing limits, and embracing new technology and digitization. Current areas of focusing include securitizations gaining momentum, rising fraud threats, and intensifying competition is intensifying. HELOCs have re-emerged as a strategic growth lever for mortgage professionals.

Refinance

Refi mortgage market share could plummet to 1990 low, Freddie warns

The percentage of newly originated loans that are used to refinance an existing mortgage could shrink dramatically in 2018 as rates rise and burnout continues.

By Bonnie Sinnock
Capital Markets Editor

September 22
Home prices

Homeowner equity more than double from five years ago

Homeowners gained an average of $12,987 in equity from last year, with Western states leading the increase.

By Elina Tarkazikis
Reporter

September 22
HMDA

CFPB gives small banks, CUs a break on HMDA reporting

Lenders will not have to report data on open-ended home equity lines of credit in 2018 or 2019 if they originated fewer than 500 HELOCs the preceding year, the bureau said.

By Brian Collins
Reporter

August 24
Home prices

Nearly 25% of U.S. properties are now equity rich

The number of U.S. properties that were equity rich in the second quarter grew by 1.6 million properties from a year ago.

By Elina Tarkazikis
Reporter

August 17
Mortgage defaults

Second-mortgage default rate gets a hair higher

Defaults on second-lien mortgages have crept up on a year-to-year and a consecutive-month basis; and first-lien defaults are above where they were the previous month, but still below year-ago levels.

By Bonnie Sinnock
Capital Markets Editor

August 15
Credit unions

How credit unions cracked the code on HELOCs

Despite rising home prices and a market where many older homeowners are loath to sell, home equity line of credit lending remains muted in all but one corner of the industry: credit unions.

By Bonnie Sinnock and Elina Tarkazikis

August 14
Foreclosures

Texas home equity loan foreclosures could become easier

Twenty years ago, Texas became the last state in the union to legalize the home equity loan, allowing people for the first time to use their own homes as collateral.

August 8

Banks on deck for quarterly earnings amid tariffs mayhem: Live coverage

The first three months of the year coincide with the start of President Donald Trump's second term in office. Investors are likely to be more interested in banks' outlooks amid swings in tariff policy than the first-quarter results.

Live Updates

Resources

The latest American Banker research and discussion on Tariffs

Frequently Asked Questions:

What is driving the increased demand for HELOCs in 2025?

Homeowners want to access equity without sacrificing their existing rates due to mortgage rates remaining elevated. This scenario has increased demand for HELOCs, rebounding to pre-2008 levels. Lenders like Achieve Home Loans securitizing $210.9 million in HELOCs to meet funding needs.

How are banks and other institutions competing in the HELOC space?

Banks have traditionally offered advantages related to portfolio and pricing, while independent mortgage banks offer speed, flexibility, and digital access. Banks vs IMBs: who wins the HELOC war explores how originators are differentiating and how quickly dynamics are shifting.

What are the main fraud risks that HELOC lenders are currently facing?

As HELOC originations become more digital, new vulnerabilities are emerging. Consumers are increasingly at risk of fraud from identity theft, fake occupancy claims, and elder-targeted scam.

What does a real-world HELOC fraud scam look like?

As more lenders enter the second lien market, a scam involving an identity thief who stole $2 million through HELOC fraud highlights the necessity of stricter borrower verification and title controls.

In what ways is the mortgage industry updating HELOC closings and documentation?

The Mortgage Industry guidelines Maintenance Organization (MISMO) released eHELOC SMART Doc standards to make digital closings more similar across systems and investors and to make things go more smoothly.

How is the secondary market responding to rising HELOC volumes?

Investor interest is increasing with HELOC deals now drawing institutional capital at scale, especially among those using emerging technology. Figure’s AAA-rated HELOC securitization’s blockchain-based home-equity line of credit securitization was the first of to receive a AAA rating from a major rating agency.