The number of warehouse providers willing to extend credit to nonbanks has doubled in the past year, according to warehouse consultant Michele Perrin.
Speaking on a panel at the Western Secondary Conference, Perrin of Perrin & Associates noted that although liquidity has improved "the time and difficulty of getting a deal closed hasn't changed that much, since most of the lenders are only taking on a very limited number of new customers," she said in an interview.
She noted that warehouse providers are "still being very selective and will not consider startups or companies with large losses in the past or even small losses recently."
Also, many warehouse banks are moving to increase their net worth requirements to $2 million from $1 million.
"The good news is that more deals will get done this year than last," she said.
The consultant spoke on a panel entitled "Where Is the Industry Headed?"
The talk was moderated by S.A. Ibrahim, CEO of Radian, who used to run Greenpoint Mortgage.
Panelists included CMG Mortgage CEO and principal, Chris George, one of the largest nonbank residential funders in California.
According to figures compiled by National Mortgage News and the Quarterly Data Report, there are at least 15 to 20 active warehouse lenders, but many new entrants are community and regional banks that will only extend credit to nondepositories that operate in their bank imprint.
