If it's true that Bank of America will securitize its entire performing $21 billion EquiCredit portfolio over the next three quarters, the home-equity market could be in for some serious spread dislocation, analysts said.

"I think they're nuts," said Dan Castro, head of ABS research at Merrill Lynch. "There's no way they can do $20 billion-plus of securitization in nine months, the market couldn't absorb it. Best case, they could maybe do half that much, a billion a month, and the market chokes on it a little bit, but doesn't pass out."

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