Friday, October 17, 2025
Closed-end second mortgages originated and serviced by PennyMac Loan Services LLC are slated for securitization, featuring a weighted-average coupon 53 basis points beneath current market trends.
Closed-end second mortgages in a new issuance of residential mortgage-backed securities from Rocket Mortgage LLC are less than a month old, underscoring the vigorous investor appetite for the company’s mortgage bonds. Apart from a notably higher weighted-average coupon, transaction metrics remain closely aligned with prevailing market norms.
Figure Lending LLC is structuring residential mortgage-backed securities featuring nearly $300 million in home-equity lines of credit. The deal has a low weighted-average coupon and a high combined loan-to-value ratio.
Three jumbo residential mortgage-backed securities that are closing maintain tight alignment with broader sector credit risk benchmarks, while weighted-average coupons fall within a narrow 17-basis-point range. Debt-to-income ratios are high on one of the deals and low on another.
A month-over-month increase in the size of home-equity holdings at mortgage banking firms was offset by portfolio declines at banks and credit unions. Combined holdings across all three types of lending institutions have expanded 13% on a year-over-year basis.
Five residential mortgage-backed securities transactions containing nearly $2 billion in loans that fail to meet Qualified Mortgage standards are scheduled to close by month-end. Weighted-average coupons span from 7.10% to 7.75%, combined loan-to-value ratios are high, and debt-to-income measures are comparatively low across the new-issue slate.
Despite an uptick in the late-stage past-due rate, monthly loan performance on home-equity products included in residential mortgage-backed securities has continued a two-year trend of consistent improvement. While prepayments on junior liens and open-end loans remained notably elevated compared to a year ago, a meaningful month-over-month improvement was recorded.
An upcoming issuance of home-equity line-of-credit residential mortgage-backed securities from PIMCO features a weighted-average coupon that is 222 basis points below the industry norm and the lowest HELOC WAC recorded in three years. Supporting the below-average coupon are low combined loan-to-value and debt-to-income ratios, along with a substantial first-lien share.
By COVIANCE Community home-equity lenders have a timely opportunity—but seizing it requires a more strategic approach. Success will come from moving beyond mass marketing, delivering personalized messaging, and simplifying the borrower experience.
The home equity lending industry is facing a pivotal moment. At a time when U.S. homeowners are sitting on close to $35 trillion in equity and struggling to pay off over $1 trillion in credit card debt, home-equity lending processes...
