06 February 2003 12:00am

The non conforming home loan market is roaring. Standard & Poor's recorded mortgage backed bond issues worth $1.3 billion in 2002, five times the level of 2001, and likely to accelerate this year.

To clear up an error from last week, Liberty Financial is the largest lender of non conforming loans. Given Liberty issued $1.2 billion of the $1.3 billion in mortgage bonds backed by non conforming loans during 2002, the bond financing program is a reasonable proxy for volumes and market leadership.

Last week Bluestone chief Alistair Jeffrey said his firm held about a...