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Warehouse Lender

FundingShield is one of the top warehouse lender and It aims at providing superior warehouse lending services nationwide. Their warehouse facilities are short-term credit facilities secured by real estate collateral that allows mortgage bankers to fund loans in their own names.

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Warehouse Lender

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  1. FundingShield: The Best Warehouse Mortgage Lender in The Industry

  2. Warehouse lending is just another form of loan albeit with a difference. It allows small- and medium-size banks to grant loans with a slight change. They grant loan without looking at making profit through charging interest for decades. Rather they prefer to make their money from origination fees and the sale of the loans.   Warehouse lenders need banks to arrange for collateral. Most of the times, it is the banks; marketable securities and loan documentation. FundingShieldis one of the top warehouse lender and It aims at providing superior warehouse lending services nationwide. Their warehouse facilities are short-term credit facilities secured by real estate collateral that allows mortgage bankers to fund loans in their own names.

  3. What is Warehouse Mortgage Lending? • Warehouse mortgage lending actually refers to a specialized line of credit that certain larger banks and institutional lenders provide to mortgage bankers. • A mortgage lender that wants to open up a storefront and start making mortgage loans to borrowers needs cash. A line of credit provides that needed cash. The mortgage banker earns the bulk of its money from the origination fees charged when the loan is made. • Funding can either be as “dry funding” or “wet funding”.

  4. The Advantages • The warehouse lender is able to earn fees and/or expand its loan portfolio without the overhead expense of a larger staff and branch office locations. • The mortgage lender has access to the cash it needs to keep making an unlimited volume of loans.  The arrangement in general expands the universe of mortgage lending options for borrowers. 

  5. The Disadvantages • A warehouse lender runs the risk that the mortgage originator fails to maintain appropriate credit standards and adequately screen its borrowers, therefore making a lot of bad loans that end up on the warehouse lender’s books. • This arrangement can lead to fraud, particularly if a mortgage lender is dishonest or is in collusion with a local title agency, appraiser, real estate agent or even the borrower. Paperwork can be falsified and the fraud isn’t always obvious.  Wet funding of mortgage loans is more susceptible to fraud so a warehouse lender needs to carefully screen the originator to minimize its risk.

  6. While the potential upside of providing warehouse lending makes such lines of credit worth a closer look, a warehouse lender needs to act prudently to minimize its exposure to the potential fraud and other risks inherent in such arrangements. FundingShield’sWarehouse Lending Program offer exceptional, personalized service, with quick local-decision making and flexible funding that has generated excellent results for lenders across the nation.

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