Warehouse lines of credit facilitate much of the mortgage lending done in the U.S. A warehouse line of credit is a short-term revolving credit facility extended by a financial institution (usually a bank) to a mortgage loan originator (often referred to a “mortgage banker”) for the funding of mortgage loans. The typical mortgage borrower may perceive the loan originator as the lender and, from a licensing and regulatory perspective, that is entirely accurate. The borrower may be unaware, however, that the loan originator may draw upon on a warehouse line to fund a substantial portion of the underlying mortgage loan.
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