NexBank of Dallas, a new entrant to the warehouse lending sector, last month was eager to expand its young business while a cross-town lender, Southwest Securities Bank, appeared to be cutting back-without much of an explanation why.
David Frase, executive vice president in charge of warehouse lending at SWS, declined to comment as did a spokesman for the bank holding company that controls the Federal Deposit Insurance Corp.-supervised financial institution.
Mortgage bankers and warehouse professionals noted that Southwest Securities stayed in warehouse lending through the worst of the mortgage downturn and even thrived, picking up new customers.
At one point it had a commitment book of at least $400 million, said one source.
Chuck Klein, a mortgage banking consultant based in the Austin area, noted that "they had a conservative program. It was very successful" but added that he has no information about its current situation.
One manager said he has received telephone calls from his customers requesting additional credit lines because of warehouse cutbacks at Southwest Securities.
A warehouse source said a client of his recently requested an increase in its line from Southwest and instead was told they were being cut back by half.
Sources say the cutbacks are not necessarily tied to the warehouse program.
Meanwhile, NexBank, which launched its program three months ago, already had $47 million in commitments to nonbanks, and said it was hoping to grow the business to $100 million this year.
Jed Meaux, the vice president in charge of the program, said the bank is targeting lenders that have a minimum net worth of $1 million. It will extend lines of up to $10 million-but only in the bank's retail footprint of Texas.
"We have about $7 million to $10 million in deals closing over the next week," he told Origination News.
NexBank also will warehouse jumbo loans as long as the funder has a take-out commitment with a secondary market investor. Meaux joined the firm last year.
During his career Meaux has worked for Novastar Financial and other firms.
