Warehouse Credit Crunch May Be Ending for Some

Warehouse credit is becoming more available, but only for the smallest and biggest mortgage lenders, said a member of a panel discussing the state of the industry at the Regional Conference of Mortgage Bankers Associations in Atlantic City. Peter Norden, president and chief executive of AMA Advisors LLC, said those companies that want a line of between $10 million and $15 million can find someone willing to provide the credit, although not at the terms the industry is used to. On the other hand, larger lenders are seeing interest in Wall Street firms providing funding, Norden said. However, at minimum these providers are looking for at least $10 million in liquid net worth. If the lender wants a $100 million line, the requirement is $20 million in liquid net worth. There are only 45 or so companies that qualify for the $10 million standard and about 15 for the $20 million, Norden said. Furthermore, warehouse providers are looking for high levels of haircuts, as high as 10 points, with 5 points being the norm, he said. Providers are restricting the types of loans that can be put on the line and they want the loan off of the line in 30 days. Norden added there are no "hospital" lines available for buybacks or loans with document problems and he doesn't know of any provider allowing lenders to borrow against the value of their servicing portfolio.