To make the warehouse lender secure, it must have three items -- a marketable first lien mortgage in which it can obtain unrestricted title, a mortgage that is pre-sold to a permanent mortgage investor limiting the time exposure to the lender, and complete control of the mortgage funds on the sale to the permanent investor.

Warehouse Lending Process

The objective to both the warehouse lender and the mortgage company is to create a profitable business relationship. The warehouse lender can make secure loans approved and underwritten according to various agency guidelines, and the mortgage company will be able to make a profitable spread on each mortgage used by this warehouse line.

To make the warehouse lender secure, it must have three items:
  1. A marketable first lien mortgage in which it can obtain unrestricted title.

  2. The mortgage to be pre-sold to a permanent mortgage investor limiting the time exposure to the lender.

  3. Complete control of the funds on the sale to the permanent investor.

The loans are approved prior to funding and specific closing instructions are given to the title companies instructing them to close the loan only when the mortgage is a first lien with a good and marketable title. In addition, prior to closing, the mortgage will be pre-sold with a written commitment in possession from an approved third party investor. After closing, the mortgage is sold to the permanent investor, and all monies from the sale will go directly to the warehouse lender for dispersal.

Under our current program, the warehouse lender will advance up to a maximum of 100% of the loan amounts which are to be purchased by third party companies or which are to be pooled

The first stage of a mortgage loan is for the mortgage banker to take a loan application from the homebuyer. The mortgage banker then secures an investor in the secondary market. The loan is then processed and submitted to underwriting for approval. Once the loan is approved, it is then sent to closing.




  1. Establishes a reputation for your company with consumers, builders, brokers and real estate agents to close and fund loans in your own name. We fund within 24 hours of request and in most cases, funds can be sent the same day of receipt of your information. This method of funding helps keep both your customers and agents content by paying for the entire transaction at the closing.

  2. Correspondent and wholesale lenders typically pay more for closed loans as well as charging you less fees. The fees brokers can earn are limited. This method of funding increases profitability by utilizing available Warehouse Lines to fund your current production into the secondary market.

  3. No more need for the Disclosure of Service Release Premiums on the HUD-1 Settlement statement as required by RESPA. Since you are closing the loan in your own name, your company is exempted from RESPA to disclose the SRP's, unlike table funded transactions.

  4. Your company gets to earn the interest of the note rate during the warehouse period, which makes up for most or all of the interest that you are paying for the facility.

  5. Your company gets to control the entire settlement and funding date of the loan closing. This eliminates the worry of promised wires from your table funding lenders, which rarely arrive on time.

  6. Enables your company to grow at a faster pace. Growth is limited without the use of a warehouse line.


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