Just how good is the residential origination business right now? Try this on for size: warehouse lenders are seeing usage rates near the 54% range, the highest reading in a decade.
According to a recent research report from The Reynolds Group, Summit, N.J., usage levels haven’t been this strong since the 2000 to 2004 time period when it ranged from 50% to 60%. In 2010 the rate was 39%.
However, Reynolds research reflects activity up until mid-year – and the origination market has picked up steam since then.
In a recent interview with National Mortgage News, a
The usage rate tracks how much of a warehouse line of credit is actually being drawn upon at a given point in time. Outstanding balances on a line can vary widely depending on what time of the month it is and are tied to secondary market sales.
The Reynolds Group estimates that warehouse advances/fundings could total upwards of $570 billion this year – a healthy 56% jump from last year.
At $570 billion it would be the sector’s best year since 2007, right before the housing market crashed in earnest and warehouse bankers committed $900 billion to their nondepository clients.
