Equity Mortgages Financing Sources... 

Equity mortgages have exploded do to the fact that rapid growth of housing in the late 70's to current, and combined with the FHLBB rule change that allows S&Ls to make second mortgage loans. This has opened a potentially large loan market. Prior to 1979, S&Ls were not permitted to make second mortgage loans. Thus, a homeowner who wanted to borrow against the equity in his or her home would either refinance with a new and larger first mortgage or leave the existing first and obtain a second mortgage loan from a specialty lender or mortgage broker. Today, an S&L can make a second provided the amount of the first and the second combined does not exceed 80% of the appraised value of the property. Thus a home worth $100,000 with a $30,000 mortgage balance would be eligible for a $50,000 equity mortgage.

Equity Mortgage To Home