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New Warehouse, Correspondent Lender May Emerge

Mortgage News

A company that is already a big traditional and reverse mortgage lender is exploring the launch of correspondent and warehouse lending businesses. The potential expansion follows similar moves by several players.

As the credit crisis was in full swing, warehouse lending capacity tumbled 85 percent — from $200 billion in 2007 to around $20 billion in 2008, the Mortgage Bankers Association reported in an April 2009 letter to federal regulators.

But just as warehouse lenders had exited the market in 2008, new players expanded or emerged in 2009.

In April 2009, Residential Capital LLC said it would use bank deposit growth at Ally Bank to fund an expansion in warehouse lending. A month later, JPMorgan Chase & Co. said it decided to continue its warehouse lending business with a select group of customers. The company had said in February 2009 that the unit didn’t fit its long-term strategy and it would be closed.

Last August, Citigroup Inc. reported a plan to provide up to $2 billion in warehouse lending facilities to mortgage originators.

In October, Freddie Mac announced the launch of a pilot program designed to help its approved seller-servicers obtain warehouse lines-of-credit through participating warehouse lenders. Later that month, BB&T Corp. said it had decided to keep the warehouse lending operations of Colonial Bank — which it acquired in August from the Federal Deposit Insurance Corporation after the Montgomery, Ala.-based institution failed.

Now, MetLife Home Loans is exploring entering warehouse lending.

In a statement today to MortgageDaily.com, a MetLife spokesman confirmed that the Bridgewater, N.J.-based lender “is exploring entering the correspondent-lending and warehousing businesses on a limited basis in 2010.”

The 4,150-employee company primarily consists of the former lending operations of First Horizon National Corp., which MetLife acquired on Aug. 31, 2009. MetLife originated $29.4 billion during the first nine months of last year, serviced 553,924 mortgages for $101.0 billion as of Sep. 30 and — through parent MetLife Bank — was the biggest U.S. reverse mortgage lender during October.

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