Mortgage lenders are busy staking claims in home equity territory by bombarding consumers with advertising.

And while consumers may not be biting fiercely, an industry researcher says more companies have been hit by home equity fever as refinancing has stepped out of the spotlight.

"There's no dramatic increase [in loan demand]," said David Olson, an independent analyst.

"What there is a dramatic increase in the number of players."

Mr. Olson estimates that there are more than 6,000 mortgage companies originating home equity loans.

Further fueling the market are about 200 wholesalers that are buying the loans and funneling them to investors.

One of the largest is Residential Funding Corp., which last year launched its Goal Line program to help mortgage companies grab more home equity market share.

Residential has 35 active companies feeding it loans, with another 30 in the wings, said Mary Tingerthal, vice president in charge of Goal Line.

"We've been nudging mortgage bankers to take a look at this product for a long time, but it wasn't until the refi market crashed that we got a tremendous response," said Ms. Tingerthal.

Headlands Mortgage, Larkspur, Calif., is one of the companies working with Residential. Peter T. Paul, the company's president, says the program has helped raise its loan volume but it has a way to go before it fills the gap left behind after the refinancing boom.

Home equity lines "fill nice niches but they're not a panacea," he said.

The popularity of home equity loans is easy to see, he said. Consumers get a lump sum or line of credit without much additional hassle and the amount is tax deferred.

Lenders find it attractive because "Ws one area of lending that still has some margin to it," Mr. Paul said. "And you don't have market risk on it."

Competition is fierce however, especially from commercial banks who, according to Mr. Paul, "still dominate this business."

The crowded market may thin out, Mr. Olson predicts, as pricing competition takes a toll on small and large players alike.

"It's all driven by Wall Street," said Mr. Olson. "They're all buying from smaller players now, and the pricing is killing some. people."

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