Warehouse lines of credit extended by commercial banks to non-depository lenders fell a modest 11.8 percent in the fourth quarter on a sequential basis, but executives who work in the sector are reporting usage ratios as low as 20 percent. Based on exclusive survey figures compiled by Inside Mortgage Finance, warehouse providers had an estimated $30.0 billion in commitments at Dec. 31 compared to $34.0 billion at the end of the third quarter. But a commitment is...[Includes one data chart]
Prospect Mortgage had roughly $975 million in committed warehouse lines at yearend. Its three largest providers include UBS Securities, Bank of America/Merrill Lynch and Fannie Mae.
The drop in warehouse commitments mirrored, somewhat, the fall-off in residential originations, which declined almost 19 percent in the third quarter, according to figures compiled by Inside Mortgage Finance.
Warehouse commitments extended to nonbanks fell 16 percent on a sequential basis in the third quarter to roughly $20.5 billion, according to new figures compiled by Inside Mortgage Finance. Compared to the same period a year earlier, commitments tumbled even more: 20 percent. The drop in commitments mirrored, somewhat, the fall-off in residential originations, which declined almost 19 percent in the third quarter. However, commitments measure how much credit a warehouse lender is willing to provide not how much it actually provides. Wells Fargo, the nations largest warehouse lender, had...[Includes one data chart]
Bargain hunters are beginning to eye the mortgage market, hoping to pick up franchises at a discount to prices paid in 2012 and earlier this year. But getting capital-rich companies to sell even with refinance production dwindling could prove to be a challenge. We haven't seen any efforts to re-price transactions in process, said Chuck Klein, managing partner of Mortgage Banking Solutions, Woodway, TX. If volume and profits are falling below the budget and forecast on deals at the discussion level, then the seller must be able to present a reasonable explanation of how they are to achieve projections in their budget and growth. Larry Charbonneau, who runs Charbonneau & Associates, another Texas-based consultancy, said...
The warehouse lending market continued to hum along in the second quarter, but executives in charge of extending credit to nonbank mortgage lenders are beginning to see certain warning signs, including lower profit margins. Profits are definitely tightening, said Chuck Mueller, president and CEO of Fidelity Bank, Edina, MN, a one-branch bank whose forte is warehouse lending. Some executives note...[Includes one data chart]