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Banks Eye Return of RMBS Home Equity Loans

Banks are mulling ways to securitize US home equity lines of credit – popular loans that suffered in the financial crisis but are coming back into vogue as house prices rise.

Lenders like the higher yields they can charge for the loans, known as HELOCs, but not the high capital provisions they require to satisfy Basel III rules.

So one option is to take the loans off balance sheet and bundle them into an RMBS – a common tactic before the crisis that created a US$100bn-plus HELOC securitization market back in the 2007 heyday.

via Banks eye return of RMBS based on home equity loans | Reuters.

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