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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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