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Home Warehouse Funding Warehouse Funding
Warehouse Funding PDF Print E-mail

Warehouse Line of credit

Mortgage warehouse funding is simply a short-term funding arrangement extended by a bank or other lender to a mortgage originator to provide funds for its loan closings. Once closed, these loans are held in the “warehouse” until they’re sold into the secondary market, typically within a couple of weeks. Mortgage brokers cannot close loans in their own names unless they obtain a warehouse line and become a correspondent lender. In our program, brokers become "mini-correspondents."  Our mini-correspondents differ from correspondents in that they do not have to hold the loans in their warehouse until purchased by an investor, and net worth requirements are typically less.  Our lender(s) buys the loans after closing when we receive complete post-closing documents and title assignment, and they take possession of the loans so that the mini-correspondent's warehouse funding is restored.


We make it easy for mortgage brokers to become mini-correspondents by requiring only $50,000 net worth, no up-front fees, and no minimum monthly loan volume.  As a mini-correspondent, you can close the loans in your name and receive part of our sales margin on the "back-end."  This allows you to make more money than you could as a broker which is restricted to receiving "front-end" fees that became capped at 3% on January 10, 2014 under the Dodd-Frank Rule. Brokers won't notice much difference in their operation when they become a "mini-correspondent" with us; the main difference is that you will sign the closing documents in your name as the lender, and you will recieve a gain on sale on the "back-end" when we transfer the loans to our investors. Instead of getting a "yield spread premium," you will get a larger "gain on sale" that is not itemized on the closing docs.


Our Team can help your company minimize the counterparty risk associated with mortgage transactions. Originators and their mortgage warehouse providers should tackle risk management as a team effort. Risks can be mitigated by performing pre-funding quality control (QC) and post closing quality assuance (QA), performing professional underwriting and closing services and documents, and vetting agents who close the loans (our Team performs all of these services). It is also important that the closing agents are fulfilling their obligations to close loans correctly and disburse the funds appropriately.  Our Team also provides services to minimize the counterparty risk associated with secondary market investors. We vett potential investors, select only reputable firms, and hedge interest rates to manage the risk of changing interest rates.


We provide warehouse funding from $1 million to $10 million for brokers, correspondents, and banks who originate residential mortgages, and we buy the loans that are funded from our warehouse facility at excellent prices. Our banks offer warehouse lines for USDA, FHA, VA, and Conventional mortgage loans, including “conventional” homes and manufactured homes. We buy the loans when you close them with your borrowers, and you get paid when we receive the closing documents, allonge, and mortgage assignment. We pay a premium above the mortgage amount and on top of your closing fees and costs, depending on the loan type and mortgage interest rate. We will email you daily rate sheets for the products you are interested in for your borrowers. The rate sheets you receive will present an array of rates per product from our banks. “Rate Adjustment” sheets will accompany the rate sheets for each product. You may already have a warehouse line and investors you’re set up with, but it’s worth your time to look at what we have to offer and maybe even talk to our traders.


Our Warehouse Funding is Easy to Get!


Our Team members will walk you through the whole process. It’s very easy to do! After you have been approved for our warehouse funding, you can fund a loan and close it in your name in minutes.


Why get warehouse funding? Because you get to control your own destiny! You decide how much money you want to make on each loan. You get to close the loan in your own name (can’t do FHA in your own name unless you're an approved Title II FHA lender). All conventional and even USDA loans can close in your name.


Our warehouse facility is very easy to set up and put into use! We have a minimum net worth requirement of $50,000, and you get 100% funding capacity (most lines hair cut you; our team doesn’t). If you have never had a warehouse line, this will be a great opportunity for you to "cut your teeth,” with no up-front cost to you, and if you already have an existing line, our warehouse facility is much cheaper than most other places. We provide the funding very quickly - our Client banks can issue the warehouse facility approval within 72 hours after acceptance of your Application and get it ready for use within a few days after that. Typically, the total time to finalize the process is no more than a week, or 2 weeks tops. You may just want to add additional warehouse capacity to what you already have – we do that too. You may have to get specific licenses for the states in which you originate and close loans.


Warehouse Line












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Last Updated on Thursday, 19 June 2014 15:49

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