Signs of Life in Warehouse

Even though originations in the primary market are beginning to sputter, it appears that warehouse lending to nonbanks is picking up a head of steam. According to exclusive survey figures compiled by National Mortgage News, warehouse commitment volumes totaled $31 billion at the end of March, a 20% increase from a year earlier. (In calculating its numbers, NMN assumes it has captured 70% of the market.) Bank of America Corp. is the presumed market leader, with $15 billion of commitments at March 31. The Charlotte company declined to confirm or deny the figure, which is based on comments made by a B of A warehouse official at a Texas Mortgage Bankers Association meeting this spring. Bank of America is a leading correspondent buyer of mortgages, and offers warehouse lines to nonbanks that sell loans to it. In fact, most top correspondent buyers of mortgages — B of A, Wells Fargo & Co. and JPMorgan Chase & Co. — offer some type of warehouse program, but none would talk about their programs publicly. According to advisers like Larry Charbonneau and Michele Perrin, more community and regional banks are eyeing the warehouse market because the profit margins remain quite strong.