The ideal warehouse provider…

As I’ve said before, things may be changing in the mortgage lending industry, but not everything is for the worse.  I strongly believe it’s a great time for smaller lenders if they are willing to take smart risks.

The warehouse and correspondent lending space is still going great guns these days–even as the larger players pull out and/or right-size their personnel.  I think it’s a great time for a solid small to mid-sized lender to jump in.

To that end, a few tips from someone who’s been around the block a time or two!

To me, the ideal warehouse provider for a smaller mortgage banker is…

  1. One which takes pride in stellar service;
  2. One stocked with proven experts at all levels.
  3. One which is willing to make reasonable exceptions.
  4. One which places their clients at the highest level and really aims to please.
  5. One which will let you talk to some of its clients.
  6. One which totally understands the mortgage business.
  7. One which will let you issue securities.
  8. One which will let you use end investors without holding you up because their net worth isn’t $50 million.
  9. One which will let you visit its shop and meet its people.
  10. One which will let you put product on your line that that doesn’t require extra overlays (imposed by that lender and not the end investor).
  11. One with reasonable loan fees.  However, keep in mind that sometimes the provider which charges the smallest fee isn’t necessarily the bank you should use.
  12. One which will issue you a committed line.
  13. One which isn’t in and out of the market.
  14. One which will let you warehouse reverse mortgages and VA IRRRL’s.
  15. One which will let you warehouse jumbos and super jumbos. 

A few other suggestions… 

Make sure that the person in your office who is in charge of finding you warehouse providers knows his/her stuff. If you don’t have such a person use an outside company that can help find the right warehouse bank for you. 

Make sure you have the best type of E & O protection –this can save you millions.

Good luck, and happy hunting!

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