Pulling the strings behind the non-QM curtain: A giant named PIMCO...

Bill Dallas of FoAM: “Most warehouse lenders are at capacity and already ‘bulged’ most of their companies. As a result, if you need additional capacity and you didn’t plan for it, there are no new warehouse players. You are dead in the water.”

As one East Coast-based banker put it: “Before the pandemic exploded, I had eight or nine new customers lined up I wanted to bank. Right now, that’s on hold until this passes.”

Compared to the same period a year ago, warehouse lines of credit to nonbanks increased by a mouthwatering 41.9%.

MBA is seeking assurances that nonbank lenders can access the Fed’s Main Street Loan Program.

Now that the merger is off, will Texas Capital's role in warehouse finance change much?

First Horizon wants FICOs of at least 670 and will only provide credit on conventional and government loans.

“This is a sea change,” said Steve Harris, president of MIAC Analytics, New York. “It’s going to get really ugly from here – and I know ugly.”

We’re still waiting to hear word on pending legislation to provide economic relief to consumers and businesses affected by the pandemic. Included in the bill is a funding mechanism for nonbank servicers.

One warehouse executive who competes against the bank in question noted: “There’s panic among their customers.”