Mortgage bankers looked into their crystal balls during the Mortgage Bankers Association Convention in Chicago Oct. 26 to 28 and saw their future inscribed on high-yield, low-rated paper.

Considered by many lenders as a risky, far-off niche relegated to small lenders, B- and C -designated loans have caught the attention of some industry giants. They were identified as an emerging trend by MBA panelist Paul Reid, president and CEO of American Home Funding, Glen Allen, Va., a subsidiary of Rochester Community Savings Bank. Reid predicted, during a roundtable discussion on the coming year, "this [product] is going to take off."

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