Mortgage Industry News

The need for a national warehouse lending solution is growing, and the issue is gaining speed and momentum both within the industry and in the national media. (If you missed it, we outlined using a national warehouse line to solve the national liquidity issue here. This post is also a good background for anyone just becoming familiar with the issue).

The Wall Street Journal continued their coverage this week in an article by James R. Hagerty:

“Many of the small mortgage banks that remain are struggling. Mortgage banks, often small, family-owned companies, aren’t licensed to take deposits and so lack that source of money for their loans. Instead, they typically borrow money for short periods from so-called warehouse lenders. They use this short-term credit to make loans to their customers and then pay back the warehouse lenders after selling the loans to bigger banks or to government-backed mortgage investors Fannie Mae and Freddie Mac.
“But this warehouse credit is much harder to obtain than it was a year or two ago because many of the big banks and Wall Street firms that used to provide it have exited that business.”

Read the full article “Under 5%, Mortgages May Be Near The Bottom“. In a related story, credit union originations were up by 17% in 2008, according to numbers released by Inside Mortgage Publications:

“Credit Unions are significantly increasing their mortgage originations in the current economic meltdown and credit crisis. According to new numbers compiled by Inside Mortgage Finance, credit unions boosted their mortgage production by a healthy 17 percent during 2008. That growth came at the same time that overall mortgage originations fell 39 percent. The result was that the credit union share of total mortgage lending jumped from 2.5 percent in 2007 to a record-high 4.7 percent in 2008. Almost one quarter of last year’s credit union originations came from just five institutions – Navy Federal in Virginia, State Employees in North Carolina, Pentagon in Virginia, Boeing Employees in Washington, and Alaska USA in Alaska.”

This report demonstrates as we have pointed out that the current recession and declining consumer confidence in large banking institutions has created a great opportunity for credit unions and community banks to grow their customer base. As many reports have highlighted in recent weeks, despite the struggles of mammoth lending institutions, smaller banks, community banks and credit unions have not experienced the same issues because they did not engage in risky investments or other questionable practices.

Mary Kladde

In my last post I stated the following:

There’s been quite a bit of lip service given with regards to supporting small business over the last couple of weeks.  Independent mortgage bankers/correspondent lenders are representative of the small businesses in question.  ACTIONS SPEAK LOUDER THAN WORDS.  Somebody somewhere in a position of authority and influence needs to get a clue quickly before it’s too late.  Let’s remove/suspend some of the capital requirements for Community Banks and Credit Unions on Warehouse Line Lending and get the ball rolling!

Today, my call was answered:

MBA Formally Asks for Capital Cut on Warehouse Lines

The Mortgage Bankers Association has asked federal banking regulators to cut the capital requirement on warehouse lines of credit by as much as 80% to alleviate a funding crisis facing non-depositories. Currently, depending on what stage of funding a loan is in, the risk weighting on a warehouse loan can be as high as 100%. This means $8 in capital must be held for every $100 in warehouse credit outstanding. For Fannie Mae, Freddie Mae, Federal Housing Administration and Veterans Affairs loans the trade group wants the capital charge to be 20%. Non-bank mortgage lenders are seeing their lines disappear or reduced with several regional banks exiting the warehouse sector as a way to preserve capital. MBA’s letter was sent to the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision.

Mary Kladde

“Fed launches bold $1.2T effort to revive economy” (JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer)

“WASHINGTON – With the country sinking deeper into recession, the Federal Reserve launched a bold $1.2 trillion effort Wednesday to lower rates on mortgages and other consumer debt, spur spending and revive the economy.

To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.”

This move by the Fed will do nothing for the Primary Mortgage Lending Market if liquidity does not loosen and become available for lenders other than the large financial institutions such as Bank of America, CitiMortgage, and Wells Fargo.

Consumer refinance demand will continue to peak since consumers do not understand the difference between the Fed lending rate to financial institutions and long term interest set by the primary mortgage investors.  Rates, however, will not significantly dip as intended until liquidity is infused back into the primary market.

There is not enough money in the system to allow independent mortgage bankers/correspondent lenders to service consumer demand in their communities.  They actually have to pick and choose which loans to fund at the end of the month right now.  Liquidity issues have even moved some of the remaining Warehouse Lines providers to suspending refinance transaction fundings in favor of purchase money business at the end of the month.  Warehouse Line Lenders do not have the money to fund the demand and they are making their customers choose which loans to fund and which loans to push into the next month.  This “push”, of course, often times represents loss to the correspondent lender aka “small business owner” and community employer.  Loss equals reluctance to hire and make capital expenditures which is ultimately the whole idea behind the Fed’s push right?

The “Bigs”, on the other hand, have already made it clear that there is no need to decrease long term rates since it is a matter of “supply and demand” and they can take this opportunity to shore up their margins.  Demand is up, supply is down…due to the fact that independent bankers/correspondent lenders cannot get the needed cashflow to compete….so there is really no need to lower rates for the end consumer until the playing field has been leveled again.

There’s been quite a bit of lip service given with regards to supporting small business over the last couple of weeks.  Independent mortgage bankers/correspondent lenders are representative of the small businesses in question.  ACTIONS SPEAK LOUDER THAN WORDS.  Somebody somewhere in a position of authority and influence needs to get a clue quickly before it’s too late.  Let’s remove/suspend some of the capital requirements for Community Banks and Credit Unions on Warehouse Line Lending and get the ball rolling!

Titan Lenders Corp President Mary Kladde was featured this week in an extensive article in the Credit Union Times, speaking as an expert resource concerning the current need for warehouse funding lines, warehouse funding options and strategies for credit unions, the current liquidity crisis, TARP funds and more.

In addition to giving a detailed overview of the current liquidity crisis and its causes, Kladde also provided insider perspective into how the current need for warehouse lending options is an advantage for credit unions:

 “For the warehouse lender, the lack of competition has created a market climate that is risk averse, which definitely works in credit unions’ favor,” Kladde said.

Warehouse lines of credit may be among the safest entries because of the 15 to 30 day turnaround, Kladde said. She touts backing from the Federal Housing Administration and Ginnie Mae and “tightened” underwriting guidelines as selling points. With banks getting TARP funds, there is discussion that Ginnie Mae may even insure the credit lines “and that may also be good for credit unions.”

Meanwhile, credit unions may be leery of venturing out because of takeout risks. Kladde said warehouse lenders, once permissive of aging loans, can no longer afford the risk of loans not purchased in a timely manner. Takeout risk can be managed in this market through due diligence with regards to compliance, fraud and quality loan production, she explained.

“Titan often requires its correspondent partners to employ its closing and post-closing services to mitigate takeout loss, ensure swift salability and leverage Titan’s reps and warrants,” Kladde said. “Should lenders refuse to purchase or fail to honor a commitment to purchase, Titan has a broad base of experience in quickly repackaging loans for sale within the current market or as ‘scratch and dent.’”

Read the full article: “Door Opens for CU Warehouse Lending“.

Mary Kladde and Ruth Lee

The mortgage market is disintegrating under liquidity constraints in the primary (origination) market.  Wall Street’s loss of confidence with their investors isn’t being reversed by massive infusions of bailout money.  Property values continue to sink and the impact on local economies is profound – equity loss, property tax loss, job loss, loss of consumer spending, business closure – these all serve to exacerbate and accelerate this recession.   The Economy isn’t Wall Street, or at least that is not where most of us feel it… it is right here in our homes, neighborhoods and towns.  With time and billions more to Wall Street, we will see a painfully slow reversal, but can we really afford to wait?

Long conditioned to determining economic health based on the rise and fall of the Dow, the small business arm of financial services are allowing the focus to remain macro – when it really needs to be micro.    The answer isn’t thinking bigger, rather thinking smaller and turning to the only stable financial quarter in our economy with capital, the community bank and credit union.  These banks have capital to lend; however, the experience gap for safe warehouse lending in the mortgage market can be a significant barrier to market entry.  As a solution, Titan has established a service platform directed at supporting warehouse lending operations focusing on due diligence, compliance and profitability.

Since Titan’s calls last month for attention to the liquidity problems plaguing the primary market, we have received unprecedented interest in our position, blog and services.   This is precisely because there are hundreds of small business owners facing their own certain demise if the unthinkable happens, if they lose their warehouse line- often a business ending event.  The remaining mortgage bankers have good business models, based on long term growth through servicing their community.  Today, they are facing the serious problem of having to ration their ability to service homeowners in their community.  A solution is critical.

Community, regional banks, and credit unions, much like the remaining mortgage bankers, have stayed the course through measured growth and conservative business models.   They did not benefit from the largesse of the last ten years with windfall profits, but they also didn’t expose their shareholders, depositors or members to the irresponsible losses seen elsewhere.    As the front line of Main Street liquidity, the community bank and credit union directly benefit from local economic health in a very direct and immediate way.

In a deepening recession, there aren’t very many viable investment options for local banks.  Wall Street offers little promise or security; fraud is rampant, losses epic.   Consumer credit and auto loans are a complicated choice of risk versus return.  Commercial lending is difficult to justify in a contracting economy.   In discussions with mortgage bankers, they often have access to a local bank that is tentatively willing to offer warehouse lending.  These banks are beginning to recognize the significant profit center that warehouse lending would offer, and the concurrent benefit of strengthening their local economy.

Despite the obvious synergies between local banks and mortgage bankers, there are strong operational considerations to be addressed.  These banks are reticent to enter an unfamiliar market with little or no operational or technological support.  From collateral management to line reconciliation to technology, a local bank will have the same operational support needs as any warehouse line lender.  Titan’s service platform provides a variable cost solution to micro warehouse lending with specific focus on the needs of local banks.  As mortgage bankers turn more and more to their local banks for warehouse lending, Titan will lead this grassroots solution to primary liquidity.

The issues of primary market liquidity and the need for warehouse line options to stabilize the mortgage market and help small banks continue to thrive despite the downfall of larger institutions in continuing to be a hot topic this week. Here are some recent articles worth noting:

Warehouse Lenders Thinning Out (MBA Newslink, American Banker – Paul Muolo)

PNC Financial Services Group Inc. and Guaranty Bank, the largest warehouse lenders after Colonial Bancgroup, both have confirmed that their warehouse lending operations will be discontinued. Liquidity will be further constrained as a result, and nonbank lenders will find it tougher to arrange financing just as the spring home-buying season kicks off. The Mortgage Bankers Association is pushing for new warehouse lending policies, with MBA President and CEO John Courson requesting a reduction in capital risk weighting on warehouse loans from 100 percent as a way to prompt more banks to enter the sector.

The national media is also starting to pick up on some of the current mortage industry buzzwords and connecting the dots between the stimulus, bailouts, TARP funds and the continuing need for warehouse lending options:

“The financial bailout program remains politically unpopular and has been a drag on Obama’s new presidency, even though the plan began under his predecessor, President George W. Bush. The White House is aware of the nation’s bailout fatigue; hundreds of billions of taxpayer dollars have gone to prop up financial institutions that made poor decisions, while many others who have done no wrong have paid the price.”

Read the full article: “Bonus furor may prompt limits on AIG bailout money.” As always, we will keep posting as the dialogue increases about these important issues. More updates soon!

For someone that makes their living forecasting and predicting trends, Jim Cramer should be embarrassed.   His comment on the irrelevance of primary market liquidity is as insightful as his push to buy Bear Stearns at $60 a mere 7 weeks before it collapsed.

“Cramer: What’s going to happen to the mortgage lenders when no one will provide warehouse lines? Two more banks announced they would no longer provide warehouse lines totaling $5.4 billion and about 27% of all lines available in the market. Non-bank lenders will be done, third party originators will be done, and competition in the market will be done.

Rates will be so high that it will kill the housing market and nationalization of mortgage lending will be a reality. What are your thoughts on this issue? –Bill

Cramer says: “I think you’re completely and utterly wrong, Bill. I think that there are plenty of banks in this country. The banks will compete. I don’t like the warehouse lines. They tended to be given [in] a lot of cases to companies that didn’t do their due diligence. Now those companies need to fall by the wayside. I think banks that do mortgages and keep mortgages rather than sending them off into the nether land are the banks I want to go with. Could competition be hurt? You know what, look [at] what we just went through because competition was freewheeling – the worst housing situation in the world that gave us the second worst bear market ever.”

It underscores my argument that the intricacy of policy, regulation and legislation should be left to the professionals not spectators, ideologues and/or amateurs.  On many levels, it is like asking for a neurosurgical consult from your dental hygienist…

This comment highlights the real chasm growing between the small “b” business arm of the financial services community and Wall Street profiteering.  For many years, Wall Street prognosticators were deified as having omniscient insight into the true American dream – getting rich.   In a bear market, there was no real downside…

Here watch me do it:  Pre-requisite:  Make grotesque amounts of money siphoning off wealth from some “innovative” scheme.  Message:  Economic Boom:  Everything is appreciating… I’ve never seen so much money to be made… buy, buy, buy (read: give me as much money as you can so I can invest it and take a slice on every transaction.)    Economic Collapse:  no one could have seen this coming, it’s not my fault,  I don’t have a crystal ball, I did the best I could…. Buy, buy, buy.  (read: give me as much money as you can so I can invest it and take a slice on every transaction.)   See… where’s my show CNBC?!?

Having watched the John Stewart slugfest with Cramer, Stewart was right… it isn’t a game or entertainment.  Jim Cramer has consistently been just wrong – reminding me of that monkey and dartboard analogy from Econ 201s required reading A Random Walk  Down Wall Street.

The reality is that the only way to get wealthy (long term) is through hard work.  Watching those outtakes on Cramer, it is obvious that Wall Street has bought into the infomercial, get rich with no participation, collect checks, follow the green and red boxes in this easy software program notion of entrepreneurship.  It is fascinating because unlike EVERY small “b” businesses… they don’t actually pay if they are wrong – they get bigger bonuses.   With no down side, no personal responsibility and obscene profits on both the buy and the sell… are we surprised that Wall Street doesn’t get it?

Cramer is just towing the company line… Wall Street really believes that unless you have a “b” (for billion) on our balance sheet, you are expendable.  Small businesses are merely quaint spectators and wannabes.   Well, don’t break your collective arms patting yourself on the back for this mess we are in, but I can tell you – small business is where we will find our rescue.

There is no TARP knight to the rescue… just the same hard work we “expendable” small business types put in before, made harder by risks taken by people we will never meet.

The warehouse line lending solution to mortgage industry liquidity issues has definitely started gotten the attention of the mortgage industry. Coverage is spreading like wildfire! Here are some updates today. First, we are featured on the front page of MortgageChronicle.com:

Firm Aims to Boost Warehouse Liquidity
Titan Lenders Corp. launched a warehouse lending platform to help community banks and credit unions enter warehouse lending, a press release stated. Titan said financial institutions can replace deteriorating revenue with income earned from financing originations for mortgage bankers. In addition, the institutions will boost economic activity in their communities by providing warehouse financing to local mortgage bankers.

And, we just found out we were featured in American Banker and National Mortgage News:

Small-Bank Warehouse Facility
Titan Lenders in Denver has started a service platform for warehouse lending operations to ease community bank and credit union entry into warehouse lending…

The issue is certainly timely and the need is great, as today’s Mortgage Implode-O-Meter reinforced:

“Clients of warehouse lenders Guaranty Bank and National City (PNC) were called with the news today that they intend to exit their warehouse lending lines of business. Both banks intend to phase out their mortgage warehouse lending operations, taking the same non-renewal approach as client contracts expire over the next 12 to 18 months.

“Guaranty Bank reportedly has $1.1 billion in outstanding commitments. With National City’s $4.3 billion, the two banks comprise an estimated 27% of all warehouse lending volume still in existence — and a huge blow to non-depository lenders who rely on these lines-of-credit to fund loans for their clientele.”

We’re not the kind of people who would say ‘I told you so,’ but if we were, now is when we’d say it. More updates soon! Mary and Ruth

by:Mary Kladde and Ruth Lee

The rise and fall of the Dow is a fickle bellwether for the health of our local economies.  As the small business arm of financial services, we can no longer wait for the macro solution.  We have begun to recognize that Wall Street is in no position to initiate a “surge” in the economy.  The Fed is focused on stabilizing the global economy, Wall Street and the “too big to fail” (perhaps too expensive to keep) mega banks.  However, locally, the deeply devastating impact of equity loss, property tax loss, job loss, loss of consumer spending and business closure is too proximate to neglect while waiting for the Fed to figure a path out of this.

The problem is too large if we consider it macro.  The answer isn’t thinking bigger, rather thinking smaller and turning to the only stable financial quarter in our economy with capital, our local banking industry comprised of community or regional banks and credit unions.  Of specific importance is the housing industry, which led the meltdown to recession and is critical to any reversal.

Today, the unsung survivors of the mortgage meltdown are local banks and small business mortgage bankers.  Local banks, like the remaining mortgage bankers, have stayed the course through measured growth and conservative business models.   They did not benefit from the largesse of the last ten years with windfall profits, but they also didn’t expose their shareholders, depositors or members to the irresponsible losses seen elsewhere.    As the front line of Main Street liquidity, local banks benefit from local economic health in a very direct and immediate way.

It is important to note that the mortgage market has changed.  The only loans being originated today are of higher quality and underwriting standards than at any time in the last 15 years.   Rates are at a historic low and millions of homeowners require refinancing options.  However, a distinct threat to any recovery in the housing market lies in the lack of liquidity in warehouse lending for small business mortgage bankers.

Capacity was driven by the mega banks and Wall Street firms for the last ten years, and the housing crisis has left less than 10% of the capacity of just two years ago.  If a lender loses their line or attempts to grow and absorb market share, they face the serious problem of having to ration their ability to service homeowners in their community.   Without lending capacity, important refinances are delayed or don’t happen, and the additional disposable income available to the local is as well. Warehouse lending cannot remain a footnote to our stimulus efforts when it is the “tip of the spear” in the housing market.

Please indulge the analogy– It is like spending billions of dollars to ensure that there is an adequate supply of flu vaccine, certainly of value to public health for quality of life, productivity loss and financial reasons.  However, if at the same time, we neglect the collapse of the entire syringe and vial industry– how do you get that vaccine into the patient?  How do you realize the benefit of those billions spent on the vaccine?  The answer… you don’t… the costs of syringes skyrocket and are rationed among those who can afford them.  And just as bad, you have subverted the “public good” purpose of the funding and wasted a pile of cash.

Participating isn’t going to be a bitter pill for local banks; mortgage warehouse lending is a profitable business.   Based on short term lending of 15-30 days, it is a simple business revolving line of credit with collateral attached.    Demand has never been higher as Wall Street firms and mega lenders are forced to allocate resources to fund their retail and correspondent business.

Despite the obvious synergies between local banks and mortgage bankers, there are strong operational considerations to be addressed.  Mortgage warehouse lending has its own requirements for compliance, due diligence and production.  From collateral management to line reconciliation to technology, a local bank will have the same operational support needs as any warehouse line lender.  As such, Titan has developed an operational support platform as a variable cost solution to micro warehouse lending with specific focus on the needs of local banks.

As Americans we recoil at a policy that says:  if one of us has to sacrifice, I vote it is you.  But we can change the policy, on a grassroots level and solve the problem ourselves.  Even better, we don’t have to sacrifice our economic futures, we can make money, enhance our communities, earn a better than market return on investment.   As mortgage bankers turn more and more to their local banks for warehouse lending, Titan will lead this grassroots solution to primary liquidity.

Liquidity issue gaining more and more traction! Possible relief in sight.  Industry media is really starting the carry the ball on the topic (but only after we mentioned it first!). Here is the first article from the MBA Newslink:”MBA Proposes Backstop for Warehouse Lines”:

 ”[John Johnson, CMB, president of MortgageAmerica Inc., an independent mortgage banker in Birmingham, Ala., and head of the Mortgage Bankers Association's warehouse lending committee] and MBA staff met with the Treasury Department last Thursday to propose a $30 billion backstop to guarantee warehouse lines of credit and “liquefy the business that existing warehouse lenders are doing.” TALF could be used in that source of funds to assist in liquefying the market, he said. On Friday, Johnson and MBA met with Federal Reserve staff.

“Johnson said federal government funds would not provide warehouse lenders with a “bailour but instead would create an interim mechanism to begin manufacturing liquidity back into the mortgage market.

“This would make it a government-guaranteed security. It would liquefy and bring new participants to the market and free up capital for the existing warehouse lender,” Johnson said.”

Read the full article “MBA Proposes Backstop for Warehouse Lines.” From National Mortgage News, “What We’re Hearing” by Paul Muolo for the paragraph that begins with:

THIS JUST IN: The Government National Mortgage Association might be open to providing (in some manner) warehouse financing to non-depository mortgage banking firms, helping alleviate the credit crisis in that sector. GNMA isn’t ready to talk about it but there are rumblings out there. Meanwhile, some regional banks are warming up to the idea of becoming warehouse providers, one investment banker told us. These banks understand that the profit opportunities in warehouse could be quite good. “I know one Illinois bank that’s looking at it but they only want to lend in their state,” said a source. “They’re telling me: ‘If it’s not in my backyard I don’t want to do it.’”

On the other hand, The Christian Science Monitor also published an article, “As big banks falter, community banks do fine“, which points out that smaller banks did not make the same mistakes that larger banks did, such as investing in risky mortgage backed securities or complex derivatives, but instead kept their assets local. As such, these banks are doing well and are anxious to separate themselves from the big banks that are creating such a negative perspective of the banking industry.

“While they account for less than 10 percent of America’s total banking assets, their traditional, values-based approach contains plenty of lessons for their larger Wall Street counterparts, some analysts say. Some also question the wisdom of allowing a few big banks to control large percentages of the US banking sector.

“Mr. Potter must be spinning somewhere in his celluloid grave,” says John Steele Gordon, a business and financial historian in North Salem, N.Y. “The community banks are doing well because they were willing to adhere to sound banking principles. They didn’t get caught up in the Wall Street craze and were less driven to keep those quarterly earnings going up and up and up.”

“Yet the community banks are interested in making a profit. Like the Connecticut River Community Bank, which had its best year ever in 2008, most do it in the traditional way: They focus on their “net interest margin” – the difference between the interest earned from loans and investments they make, and the money paid out to depositors.

“But there’s another component as well, says William Attridge, president of the Wethersfield, Conn.-based bank: Most community bankers know their customers.

“We’re lending to small businesses, and in small businesses the individual is a significant part of that,” he says. “There’s a character component: That means we might make loans that possibly someone else wouldn’t if they just looked at the financials, because we know the individual well and what their resources and talents are. On the other hand, there are probably some [loans] that look good on paper that we wouldn’t make.”

We will keep following the growing coverage on this issue and keep you posted on our efforts to keep bringing smart solutions to the mortgage industry crisis to light.

Mary Kladde

This is another article we wrote earlier this year to address some of the primary concerns we see for the mortgage industry, such as national liquidity, mortgage technology adoption and quality production.

TIMELY ACTION IS REQUIRED:

With an economy in crisis, liquidity unable to meet demand and a pillar industry like housing in ruins, action is required.  The government has a unique opportunity with its newly minted FHFA and control of the GSEs to establish some standards for the industry as a whole, revolutionize it with current technology.  When or if those institutions return to the private sector, the real changes we could affect would revolutionize the industry saving cost (which are always passed on to the consumer), redundancy and confidence in our product.

The market has not responded to rising underwriting requirements or the elimination of all but most standard loan products because investor confidence has been sorely shaken.  To affect both a short and long term solution, we have to find the means of restoring that confidence in the value of quality American mortgage loans, and the more we delay, the longer we protract this market contraction.
Continue reading »

It seems the mortgage industry is finally listening to reason. We recently suggested a common sense way to solve the liquidity crisis that would both assist the mortgage market in a much needed rebound and spend the taxpayers money in a way that will actually benefit them and provide returns down the road, unlike TARP funding, bailouts and the rest. In case you missed our previous posts on the topic, check out “Solving the Liquidity Issue“, “Creating Liquidity in the Primary Market“, and “Stimulus Package, TARP Allocation, Warehouse Line Lending.”

Basically we came out and explained how the liquidity issue could be addressed by developing a nationally subsidized warehouse line: “I PROPOSE…..that instead of giving TARP funds to individual companies that can’t be controlled or take direction, the “FEDS”, under the direction of the FHFA or some other specially created managing body, should use the money to create a nationally subsidized Warehouse Line Provider. Under this concept, Taxpayer money would cease to be spent never to be seen again by only but a few.  But instead…..would immediately show a return on investment and potentially lessen the overall burden by producing revenue for the government.”

Shortly afterwards, John Courson (MBA President and CEO)  testified to the House Finance Committee concerning the lack of access to Warehouse Line Lending for independent mortgage bankers. The idea is gaining traction and attention quickly. In a recent article, Inside Mortgage Finance reported this week that “Independent, non-bank home lenders who sell mortgages to Fannie Mae and Freddie Mac are looking to the GSEs for assistance in restoring liquidity to warehouse lines of credit. The mortgage banking industry and the warehouse lending sector are stepping up their lobbying efforts for action that will help improve warehouse lending capacity.”

In addition to the content we have been developing on this subject for the blog, we have also recently expanded our Warehouse Lending page on our website with more in-depth information on the workings of a solid warehouse lending operation.  We are looking forward to increasing the dialogue on smart solutions to the liquidity crisis at the Legislative Conference in Washington in a couple of months, and will keep covering this topic as it develops. I hope that this common sense approach gets the attention and traction it needs to actually be put into effect.