The warehouse lending sector has always been a small community of mortgage professionals who know each other, socialize at trade shows, and occasionally raid each other’s shop for talent. When a new player emerges, word spreads quickly.
The latest entrant to the (now) lucrative warehouse business is
Fortis, you might say, is in the market to lend money and recently launched a website explaining what it does and even reprinting an article by one of our sister publications about the market.
But there’s a problem with Fortis: the firm (a nonbank), its sales staff and management are hard to get hold of. Let me correct that: they’re really hard to get hold of.
Now, there’s nothing wrong with not talking to the media, but when your website provides no information regarding your firm’s physical address and little in the way of contact information, that’s not necessarily a comforting thing—for either journalists or potential clients.
Michelle Perrin, who brokers warehouse lines for a living, viewed the Fortis website and tied to get a hold of the company but to no avail. “Fortis provides no headquarters location and only one point of contact and a phone number answered solely by an automated attendant,” she said.
I doubled checked Perrin’s research, confirming her findings. I emailed a sales associate listed on the Fortis website, Mike McDonald, and received an email from one Jack Conners who described himself as a senior director of operations at the firm.
Conners promised to call me in a few days, and then when he did, he left a message with no telephone number. My cell phone captured the number and when I dialed, no one ever picked up, not even voice mail. He then emailed me (a few days later) to say he’d be out of the country and would contact me when he returned.
So, who’s behind Fortis? It’s hard to say. A presentation on the firm, downloadable from its website, says the company has been an expert in capital markets since 1994, transacting “over $200 billion” in asset-backed deals.
There’s not much information regarding its track record in warehouse finance, but the presentation says it has an “expected” client base of at least 200 firms with total commitments exceeding $1 billion.
I have yet to find a client of Fortis, but one executive based in the Midwest told me he began negotiating a line with the company a month ago only to pull out of the deal last week.
This executive, who spoke under the condition his name not be used, said Fortis wanted roughly $93,000 up front on a $6 million line. The application fee was $1,000. His contact was McDonald, but when he pressed the sales associate for more information none was forthcoming.
He then asked McDonald for references and then received an email that said this: “We have reviewed your request for additional information (referrals). It is our policy to not disclose or provide any information regarding our clients that have any financial dealings with our fund.”
Perrin eventually got her hands on a pricing sheet from Fortis, saying its rates were dirt cheap: 2% above Libor and with no floor. “A lot of mortgage bankers will see these rates and jump at it,” she said.
But in regard to Fortis, Perrin, for now, is urging extreme caution to her clients and this advice: “Ask lots of questions and require references from verifiable companies who are already funding with any potential lenders.”
As for Fortis, McDonald, Conners and any other executives at Fortis reading this, I’m all ears. I like to let our readers know about any and all warehouse providers. Warehouse lending is the life blood of the nonbank sector.
There are at least 40 open and active warehouse banks operating today. The market can always use one more good firm.
