The Strange Case of eWarehouseOne

In this week's National Mortgage News we published a story about an interesting warehouse lender called eWarehouseOne. EWO is interesting for several reasons, including the fact that it claims to have $3 billion in warehouse commitments, but many of the top warehouse managers that we've known for years have never heard of them. Nonetheless, we're all for new entrants getting into the mortgage banking space, especially if they're adding liquidity to the market. Who knows, maybe EWO will prove the naysayers wrong. But perhaps one of the most interesting aspects of the firm is the fact that it is soliciting investors over the Internet. In a nutshell, it wants to use investor money to make warehouse lines. EWO is not a bank so it needs to get cash from somewhere. On its website the firm asks this very basic question: “Why invest in mortgage warehouse lines of credit?” Its answer is this: “Unlike other real estate investments that require you to hold long term assets, this product is based on short term lending, usually 30 – 120 days for return on investment and is fully secured…” So, stay tuned.