Over the past few months eWarehouseOne has been gaining somewhat of a buzz among small to medium-sized nonbanks that have been searching high and low for a good deal in warehouse financing. But at the same time, these very same lenders have been asking a very basic question: who exactly are these guys?
Since mid-February I've talked to eight different lenders who have been in contact with the firm about its pricing. So far, they like what they hear: $1,000 application fees, a $3,000 commitment/underwriting fee, and lines priced at 275 basis points over LIBOR. (The pricing and app fees might vary depending on the size and capital position of the shop.)
But none of these lenders – most of whom did not want their names published – have closed on a line with eWarehouseOne.
Indeed, the company appears to be a bit of anomaly. For starters, it's a nonbank in a sector dominated by regional and money center banks the likes of Wells Fargo & Co., JPMorgan Chase, First Tennessee, BB&T, and Flagstar, among others.
Its backers include private equity money and overseas banks – according to Anthony J. Simich, a division vice president for the firm who's based in Newport Beach, Calif. Initially, Simich was hard to get on the phone but then agreed to shed a little light on the privately held company, noting that the firm's managers and top executives prefer to stay out of the limelight.
When asked how many employees work at eWarehouseOne, Simich was uncertain, but said the company has been in business for 14 years and has roughly $3 billion in commitments on its books.
A former wholesale account executive for Option One and Novastar, he joined the firm a little over two months ago, believing that with Bank of America scaling back its once massive presence in warehouse finance, the opportunities might be endless. “We think this market is wide open,” he said.
He explained that the company's “sweet spot” is the 'broker to banker' market – firms that are trying to grow but need a capital partner. He noted that if an applicant does not get approved for a loan its application fee will be refunded. Simich explained that he and five other account reps are tasked with finding clients, taking applications and assessing credit. “We also work with individual contractors,” he said.
As for where exactly the firm is located, that's a hard question to answer. Simich could not be reached to answer follow up questions. His email tag line lists an office in Newport Beach and he told NMN that the firm is ready to sign a 4,000 square-foot lease in Orange County.
Mortgage executives interviewed by NMN seemed bothered the most about a lack of details – including the firm's office locations – coming out of the firm. Andrew Peters, CEO of First Guaranty Mortgage, McLean, Va., a mortgage banker for 20 years, said he spent four months working with eWarehouseOne but ultimately decided not to go with the firm. He declined to say why.
Bill Dallas, a veteran mortgage banker who now runs Skyline Home Loans Lending in Calabasas, Calif., said he too looked at doing business with the firm but passed. “I was told by my account rep not to send in my $1,500 app fee because he couldn't get answers to basic questions,” said Dallas. He declined to elaborate.
One of the company's regional reps was industry veteran Henry Brandt who departed after two weeks at the firm. Brandt declined to comment. A source close to him confirmed his departure. As of late last week Brandt's name was still listed on eWarehouseOne's website.
So, who are these guys? A hungry upstart/veteran that enjoys its privacy, but is so busy that it has a major communication problem with the industry that it's trying to serve? Maybe – but that's not how warehouse lenders succeed. It's all about communication and handholding -- and answering questions. Lots of questions.
