How to Get a Warehouse Line

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7 · 08 · 13

As the housing finance agencies and warehouse lenders have gravitated towards stricter approval requirements, one warehouse lender says it is taking a different approach and has some advice for mortgage bankers.

Fidelity Bank says its mortgage warehouse program funds mortgage production from the point of closing to the loan’s sale on the secondary market.

The financial institution says that it has been providing warehouse funding for more than two decades and has arrangements with roughly 18 mortgage bankers.

During 2012, Fidelity says it funded $3 billion in mortgage originations.

Loans that can be financed include agency-eligible loans, government mortgages and jumbo home loans, the company said in a statement to Mortgage Daily. Bond program loans can also be carried on warehouse lines.

“Simple pricing” offered by Fidelity consists of interest and fees based off prime with a floor rate and a per-file fee.

There are no origination fees or minimum usage fees.

Loans backed by properties in any state can be financed.

The Edina, Minn.-based firm provides warehouse lines to mortgage bankers with headquarters located in the central portion of the country including in the states of Colorado, Kansas, Minnesota, North Dakota, South Dakota Utah and Wisconsin.

Fidelity noted that while investors, the Federal Housing Administration, secondary lending agencies and warehouse lenders have raised net worth requirements as a result of increased pushback, compliance and counter-party risk over the past five years — it utilizes a different strategy.

“Fidelity Bank’s approach is to consider each client individually based upon their financial situation and their specific needs (ex. size of facility needed),” the statement said. “We then consider these things within the backdrop of the risks and opportunities in the market at the time.”

Although Fidelity has no hard-and-fast approval standards, it did note that tangible minimum equity is usually $750,000. A majority of equity needs to be in cash or liquid assets.

The maximum leverage ratio is 20-to-one.

Fidelity recommends that mortgage bankers have their financial packages available and be available to discuss the information.

Mortgage bankers should first define what it is they want before searching for a warehouse lender, according to Fidelity. Then, each lender prospect should be researched to determine how they will meet the mortgage banker’s objectives.

Among factors to consider are tenure, access to decision makers and relationship engagement and advice. Fidelity also says that stability, price and captive versus non-captive arrangements need to be considered.

In addition, the warehouse lender’s ability to provide referrals to other industry professionals should be integrated into the final decision.

Information about Fidelity’s warehouse program is available online at


Mortgage Daily Staff


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