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Current Warehouse Lending Issues. Presented by Michele Perrin Perrin & Associates July 9, 2009. Warehouse Lending Questions on Everyone’s Minds. Who’s still lending? Who can get a new line? What will it cost? Non-traditional sources of financing What if you can’t get a line?.

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current warehouse lending issues

Current Warehouse Lending Issues

Presented by Michele Perrin

Perrin & Associates

July 9, 2009

warehouse lending questions on everyone s minds
Warehouse LendingQuestions on Everyone’s Minds
  • Who’s still lending?
  • Who can get a new line?
  • What will it cost?
  • Non-traditional sources of financing
  • What if you can’t get a line?
who is still lending
Who Is Still Lending?
  • 12 Mid-Market Lenders
    • Mostly “Taking Applications”
    • May require significant share of wallet
    • Some are very regional/narrow in scope
  • 3 Broker-to-Banker Lenders
    • Very expensive and restrictive
  • 4 Large Cap Lenders
    • Minimum net worth $15-30 million
who can get a line
Who Can Get a Line?
  • Companies with net worth of over $15MM
  • Companies with deposits of over $5MM
  • Very successful companies with no losses
  • Strong alliances with correspondent investors
  • Companies in Chicago (!)
what will it cost
What Will It Cost?
  • LIBOR floor of 2.50% or more
  • Margin of 2.75% or more
  • Some lenders have floor of 8% or more
  • Facility fees of .25% to 2.00%
  • Expect all-in effective rate of 6.00% or more
non traditional sources
Non-Traditional Sources
  • Local Banks—especially where you do business or have a relationship
  • Private Equity—even friends and family
  • Affiliation with a credit union or bank
  • Buy a bank
  • Rob a bank!!
what if you can t find a line
What If You Can’t Find a Line?
  • Retail Originators can broker out loans—less risky, too
  • Use electronic delivery to investors to speed up turn times
  • Sell to FNMA directly on ASAP
  • Raise prices, decrease volume and increase margins
  • Switch to an honest profession!
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