The development of nontraditional markets is undoubtedly changing the mortgage banking industry. From subprime, to high loan-to-value, to home equity deals, mortgage banking firms are challenged by numerous new obstacles as they move into subprime and nonconforming business segments.

Though the high risk involved with such transactions continued to scare off investors for most of this year, two deals that priced last week - GMAC-RFC's high LTV transaction (see related article below) and GE Capital Mortgage Corp.'s $418 million home-equity offering - may foreshadow a trend back toward greater interest in atypical mortgage product.

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