Mid-size banks have a new advocate in warehouse lending, even after large retail lenders cut down on facilities or completely exit the space. Lending solution provider Mortgage Warehouse Network (MWN) launched a platform offering banks the connections needed to establish and maintain a warehouse facility without creating a separate bank division to manage the lines. Warehouse lines allow banks to generate profit on short-term investments while simultaneously offering the industry needed access to funding for single-family mortgages. “In these times of low interest rates and surplus capital, banks are looking for ways to bring higher returns on equity while still staying in safe investments,” says MWN’s CEO Dennis Ferstler in a media statement. As retail lenders like Citigroup (C) and JP Morgan Chase (JPM) shutter or slash warehouse facilities, independent mortgage bankers face a growing shortage of funding. A Wells Fargo (WFC) spokesperson recently confirmed to HousingWire that the bank plans to launch a $4bn warehouse facility, indicating at least one major lender sees value in operating within the space “From a risk standpoint, the warehouse lending business is now one of the best businesses a bank can be in because the industry is only funding safe, pre-approved agency paper,” says MWN’s COO Jeff White in a media statement. The company offers a seamless technology platform that manages operations, funding logs, fraud detection, redundant underwriting and real time reporting so banks interested in entering warehouse lending can keep an accurate record of operations and avoid errors associated with manual processes. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.
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