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August 28, 2026
Working the Market We Have: Why Second Liens Matter Now
The recent Western Secondary Conference offered a valuable look at how the industry is navigating a market that remains challenging. The conversations took many forms, but they all circled back to the importance of second liens. And the numbers show why.
ICE reported that second-lien activity reached its highest first-quarter level in 18 years, while a recent HELN News analysis found that independent mortgage companies are gaining HELOC and Closed-End Second share from traditional depositories.
For brokers and correspondent lenders, the message is clear. There is meaningful business available today without waiting for the first-mortgage market to change.
The Market Is Already Here
According to the August 2026 ICE Mortgage Monitor, mortgage holders now have a record $18 trillion in equity, including $11.7 trillion considered tappable.
Homeowners still need financing for renovations, debt consolidation, large purchases and other priorities. What has changed is how they are accessing it. Rather than refinance an entire mortgage balance, more borrowers are using the equity they have built while preserving the financing already in place.
That makes second liens more than an alternative product. They represent a meaningful source of business in the market as it exists today.
A Growing Opportunity for Independent Mortgage Companies
Home equity lending has historically been dominated by banks and credit unions, but the competitive landscape is changing. According to a recent HELN News analysis of America’s Credit Unions data, banks’ share of home equity lending declined from 40.5% in June 2025 to 36.8% one year later as mortgage companies expanded their presence.
That shift creates a meaningful opening for the TPO market. Brokers and correspondent lenders already have the borrower relationships, origination expertise and distribution networks needed to compete for this business. Second liens give them another reason to reconnect with past customers, create new referral conversations and generate production.
Capturing that opportunity requires more than a single product. Borrower needs vary. Some benefit from the flexibility of a revolving HELOC, while others prefer the structure and predictability of a Closed-End Second. Originators need access to both, supported through the channel that fits their business.
Second-Lien Solutions Across Every TPO Channel
Arc Home has built a second-lien platform designed to support the full TPO market.
Wholesale brokers have access to HomeEQ, our digital HELOC solution, as well as a Closed-End Second. Delegated correspondent lenders can access both HELOC and Closed-End Second solutions. We also offer a Closed-End Second through our Non-Delegated Correspondent channel.
That breadth allows our partners to build a more complete home equity strategy. It also gives them the flexibility to match borrowers with the right structure rather than trying to fit every scenario into a single solution.
The mortgage market may remain challenging for some time. But challenging does not mean there is no opportunity. Homeowners have record equity. Second-lien activity is at its highest level in nearly two decades. Independent mortgage companies are gaining share. And Arc Home is positioned to support this business across every TPO channel.
We do not need to wait for the market to change. We need to work the market we have.
- Brian Devlin, President/CEO