A story about change in the warehouse lending sector…
Once upon a time, there were very few banks doing warehouse lines. At some point, that changed, with hundreds of smaller thrifts jumping into the market . For a while, it seemed that every warehouse bank was going after the same clients, making it a buyer’s market.
Today, the situation is dramatically different. Most banks are loaned out. Maxed out. Simply not taking on any new clients or extending increases to their existing clients.
Suddenly, many security-issuing mortgage bankers are looking to become approved take outs with non-issuing mortgage bankers. In fact, I know of one lender with a $50 million net worth who was turned down by its client’s warehouse bank. I know of another lender with a $100 million dollar net worth who has been turned down by a number of the larger Wall Street and Big Four warehouse divisions because they are out of money for this year.
Things are changing. Stay tuned.