One large credit union on Long Island is finding that itsmembers have both demand and ability to take out home equity loansand lines of credit.

Chuck Price, lending manager for the 150,000-member, $1.5billion NEFCU in Westbury, N.Y., said he believes property valuesin his area have largely settled down, which has helped the CU toconsider rebuilding its home equity business.

“We only lend in New York and we think that property prices herehave bottomed out,” Price said, adding that NEFCU found a significant number of its members have homeequity that they would like to start using.

“Some of them have been paying on their mortgage for years andhave never opened a home equity account before,” Price said.“Others didn't see their property values drop as much as theythought they had.”

Price added that lower documentation requirements for homeequity loans and a more difficult process to refinance mortgageshad combined to help make home equity loans more popular thanmortgage refinancing.

For example, he noted that NEFCU uses an automated appraisal system backed up with taxrecords to help underwrite the home equity loan whereas refinancedmortgage loans have to conform to the more stringentstandards.

Price also noted that most of the home equity loans have beenhome equity lines of credit.