Rising interest rates and home prices and a recently passed job creation act may spur a big increase in the issuance of home equity lines of credit in the residential mortgage-backed securities sector, according to Fitch Ratings."HELOCs were not able to be securitized using a REMIC structure, as each additional draw was considered a new loan prior to the passing of the American Jobs Creation Act of 2004, which went into effect Jan. 1 of this year," said Andrea Murad, a Fitch director. "The jobs act addresses the revolving nature of a HELOC that allows borrowers to draw on their lines, after the loan has been securitized." The analysis was published in the latest edition of Mortgage Principles and Interest, the rating agency RMBS newsletter. Fitch can be found on the Web at http://www.fitchratings.com
