Survey: 88% of HEL Lenders Doing Subprime

BenchMark Consulting International, Atlanta, has reported that 88% of the participants in the 19th annual Consumer Bankers Association Home Equity Lending Study originated subprime credits in the 12 months ended June 30.The subprime credits -- those rated C or D (defined as having a FICO score less than 630) -- represented an average of 11% of new home equity loan accounts and 6% of new home equity line of credit accounts, BenchMark said. "While not as brisk as in the previous two years, overall home equity portfolio growth continues on a double-digit pace, according to the data, and home equity line growth is 25%," said Brian King, manager of BenchMark's consumer lending and mortgage banking practice. The study includes findings on pricing, marketing activities, sourcing channels, underwriting attributes, and delinquencies/chargeoffs, among other factors. Conducted by the CBA in conjunction with BenchMark, the report included 39 participating home equity lenders, an increase of more than 50% from the total in last year's study, BenchMark said.