Home equity loans

After home equity surged in 2023, average gains slowed last year before falling into negative territory over the past 12 months, Cotality said.

This year Point has funded more than $2 billion in home equity investments to more than 20,000 homeowners nationwide.

The home equity investment provider first approached the securitization market in July 2024 to raise $217 million.

Fortress has been one of the most active home equity investment firms in November, investing $1 billion in Cornerstone.

A large majority of the pool assets, 86.2%, are second-lien home equity investment contracts that have a weighted average (WA) multiple share rate of 2.00x.

The lender, which reported over $200 million in home equity line of credit volume in the recent quarter, suggests the business can deliver massive scale.

The agreement with D2 Asset Management doubles the firm's previous commitment to Unlock, as current economic trends provide momentum for the growing sector.

Secondary market interest in home equity contracts is drawing new participants, with 2025 securitization activity ahead of last year, industry leaders said.

TPG Angelo Gordon estimates there's a $2 trillion market for home equity products. Thanks to tighter lending standards, the debt also appears safer than in the 2008 financial crisis.

Securitizations are breaking new ground and whole loan investors have been active as nonbanks increasingly originate and sell second lien products.

Most of the contracts in Point Securitization Trust, 1,750 (81.64%), are second-lien as of the cut-off date.

The funding round will help Button Finance, which leverages AI to underwrite home equity financing, expand its range of products to more borrowers.

The second-lien loans face low recovery post-default, especially if home prices drop.

The company's closure comes in a year when it touted successful capital investments but also faced growing legal scrutiny.

The class A and B notes will receive cash distributions to reduce the interest payment amount and any interest carryforward. Principal payments will follow interest payments.

Companies announced new product rollouts and capital raises last month, but some are also facing lawsuits as the industry encounters heightened attention to the lack of consumer protections.

A trigger occurs if the reserve fund is less than 50% of the reserve fund target amount, or if the payment date where the outstanding HEA valuation is less than 80% of the starting home valuation.

The securitization from the Boston-based fintech was "significantly oversubscribed," according to the company.

Stakeholders are watching carefully as the 2023 crisis and a capital proposal increase banker wariness of mortgage assets, speakers at Invisso's MBS Forum said.

Price growth is decelerating but still driving historic home equity gains for owners and widening the gap between the haves and have-nots in housing, ICE finds.