Second mortgages and subprime loans no longer represent the ugly stepchildren of the mortgage lending industry, say executives of the National Home Equity Mortgage Association.
Lenders that previously had specialized in conventional loans are hopping onto the home equity bandwagon, after seeing the attractive margins, said outgoing association president Fred Baldwin.
The group is kicking off its 22d annual convention today in Naples, Fla., where it expects record attendance.
"Everyone seems to be jumping into B paper," Mr. Baldwin said. "There are also a lot more people on the equity end of things. The profitability of this kind of paper really brought things in."
More than 770 people are expected to attend the conference, up from last year's record of close to 600.
Legislation will be in the forefront of many lenders' minds in the coming year, said Mr. Baldwin. In fact, the home equity association, which has traditionally focused on education and networking, may be getting a lobbying organization of its own. "Although we support the American Financial Services Association's political action committee, members are asking for our own," he declared.
Many veteran home equity lenders reported record volume and profits in 1995, and are looking forward to another great year in 1996.
The nation's recovery from recession has played a big part in increased volume, and increased association membership, said Stanley Zimmerman, who is slated to become the group's new president.
"That's making for more business activity," he said. But he's also looking for 1996 to provide increased competition in the industry, with lower prices for consumers.
Beyond the increase in the number of companies expected at the conference, more employees are being sent by each company, Mr. Zimmerman said.
Home equity lenders are "broadening the number of decision makers within their companies," he explained.
Since its birth in 1974 with 12 members, the association has had a reputation for providing the already close-knit home equity lending community with a networking arena. Despite the swelling in the size of the organization, networking still continues to be a focus at meetings, Mr. Zimmerman stressed.
Last year was marked by the group's biggest jump in membership ever - 50 new companies were added, for a total of 240, said Craig Sandell, data manager.
