Warehouse Lending Resource Center


Welcome to MBA's Warehouse Lending Resource Center (click here to read a definition of warehouse lending). This resource center provides a central place to track key initiatives regarding warehouse lending. Relevant MBA policy, actions and other helpful guidance are also consolidated here.

Due to the rapidly changing nature of this very important issue, this resource center is designed to be very fluid. Check back often for information on new developments.

Background

Warehouse lending has declined significantly. This trend is a present and growing danger to a source of capital for many mortgage lenders. Warehouse lenders going out of business, terminating, or adding restrictions to their warehouse lines of credit are causing independent (non-depository) mortgage lenders to struggle to maintain their ability to serve borrowers by providing funding on schedule and offer consumers options when shopping for a mortgage. Warehouse lenders serve as a crucial short term funding source for mortgage bankers, specifically those that are non-depository institutions, which help maintain adequate capacity for all forms of mortgage originations, including home purchases, refinance and modifications for troubled borrowers, and other transactions.

Recently, several commercial banks have purchased other institutions that are active in the warehouse lending business. The future of warehouse business appears uncertain because many banks have restricted warehouse lines, ceased to issue new lines or stopped increasing existing lines, and increased pricing and restricted terms have closed down lines altogether. These actions have left many non-depository lenders without adequate and viable sources of capital.

MBA has been working on solutions that address the threat to independent mortgage lenders. With the help of an ad hoc Working Group on Warehouse Lending, members and policy staff have been investigating the range of solutions, as well as considering the viability of all the options in terms of the industry's need for them and the present political environment. MBA has hosted several meetings with independent mortgage lenders who rely on warehouse lines of credit, warehouse lenders, accounting experts, consultants, and government-sponsored enterprises (GSEs) and continues to coordinate with other industry parties to restore warehouse lines of credit to independent mortgage bankers.

Due to the rapidly changing nature of this very important issue, this resource center is designed to be very fluid. Check back often for information on new developments.

Warehouse Lending Resource Center Spotlight

June 19, 2009: MBA Sends Letter with Recommended Strategy to Add Capacity to Warehouse Conforming Loans

MBA and the Warehouse Lending Project (WLP) sent a joint letter to Secretary Geithner and FHFA Director Lockhart with a proposed structure for Fannie Mae and Freddie Mac to participate in warehouse lines of credit backed by conforming conventional mortgages. The warehouse participation structure would be available for warehouse lines of credit structured as "purchase and sale" agreements from a legal standpoint. Under such lines, the independent mortgage lender would sell the loan to the warehouse lender with an agreement to repurchase at a later date for ultimate sale to the buyer of the loan or securitization into a GSE MBS. Loans eligible for GSE participation under such lines must be covered by DU or LP "Accept." GSEs' participations will be to a maximum of 50 percent of the qualified advances and would not take place until two days following the provision of the funds by the warehouse lender. In conjunction with their due diligence, of the proposed structure, MBA and the WLP received a memo from BuckleySandler LLP that the proposed legal structure of the program would be within the charter limitations of Fannie Mae and Freddie Mac.

May 8, 2009: MBA Requests Treasury Implement Ginnie Mae Warehouse Solution

MBA sent a letter to Treasury Secretary Geithner supporting a Ginnie Mae solution for warehouse lending related to government guaranteed mortgages. The letter and terms of the Ginnie Mae proposed solution are attached. The proposed solution involves an inter-agency agreement between Treasury and Ginnie Mae that would allow Ginnie Mae to administer a program that would provide financing on the day after loan closing. The proposal requires approval by Treasury prior to implementation. Read the letter and view the term sheet as submitted by Ginnie Mae .

March 24, 2009: MBA Sends Letter to the Board of Governors of the Federal Reserve System (Fed), Federal Deposit Insurance Corporation (FDIC), the Office of Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) on Warehouse Lines of Crredit

MBA formally requests the Board of Governors of the Federal Reserve System (Fed), Federal Deposit Insurance Corporation (FDIC), the Office of Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) study the current risk weightings for warehouse lines of credit for real estate financing and make appropriate changes to better reflect the risk associated with lines backed by Fannie Mae, Freddie Mac or Ginnie Mae eligible loans and related servicing advances. The proposal does not extend to other single family mortgage loan types such as non-agency subprime or Alt A loans. Read the letter.
March 5, 2009: MBA's Proposed Warehouse Lending Treasury Guarantee Program and Warehouse Lending Process Flowcharts

MBA is seeking a short term (24 month) federal guarantee of warehouse lines that are collateralized by Fannie Mae, Freddie Mac, FHA, VA and RHS-eligible mortgages that are held for sale by non-depository mortgage lenders. Read MBA's Proposed Warehouse Lending Treasury Guarantee Program.

In addition, MBA created two flowcharts to illustrate the processes of warehouse lending. One explains how a loan moves from closing to securitization. The other shows how a loan moves through the warehouse lender.

February 20, 2009: Letter to Mortgage Banker Members

On Friday, February 20, John A. Courson, President and Chief Executive Officer, Mortgage Bankers Association, sent a letter to MBA's mortgage banker members detailing recent efforts relating to this issue. Read the letter.

February 11, 2009: MBA Publishes Issue Brief on Warehouse Lending

MBA released its issue brief on warehouse lending. This brief outlines the issues and defines MBA's position on it. Read the brief.

February 5, 2009: MBA Letter to Timothy F. Geithner, Secretary of the Treasury on Warehouse Lending

On February 5, MBA sent a letter to Geithner requesting federal government assistance to restore liquidity to the warehouse lending sector. Read the letter.

See more updates and resources below

Additional MBA Resources
  • Warehouse Lending Flowcharts
    MBA created two flowcharts to illustrate the processes of warehouse lending. One explains how a loan moves from closing to securitization. The other shows how a loan moves through the warehouse lender.
Additional Updates and Resources
  • Warehouse Lending Project Web site
    The Warehouse Lending Project is a developing coalition of independent mortgage bankers that are working together to address this vital issue.
    (February 12, 2009)