As lenders build up their home equity businesses, they are finding a willing secondary market for their loans on Wall Street.

"Investors have been the beneficiaries of the trend" toward more home equity and subprime lending, said Dale Westhoff, senior managing director at Bear, Stearns & Co.

Speaking at a New York symposium sponsored by Frank J. Fabozzi of the Yale University School of Management, and Information Management Network, New York, Mr. Westhoff said Monday that home equity securities carry less risk of prepayment than some conventional mortgage securities.

For instance, home equity loans are smaller than mainstream mortgage loans, so borrowers are under less pressure to refinance if rates decline.

Home equity borrowers with impaired credit also have limited ability to prepay.

"Credit quality is really the thing you have to get your arms around in the home equity sector," Mr. Westhoff said.

And lenders have taken steps to help investors overcome credit-quality concerns, panelists said.

Andy Sirkis, senior vice president of Saxon Mortgage, Glen Allen, Va., said his firm recently hired a manager with more than 20 years of subprime and home equity lending experience as its senior vice president of underwriting.

"We want to make sure we understand every single loan. If we do a bulk purchase" of loans to be securitized, he said, "we'll go in with our staff and underwrite every single loan."

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