Lenders now closing warehouse lines for brokers

Many mortgage brokers have had the ability to secure lines of credit with major lenders to fund loans faster and increase their profit margin. They commit to a specific volume of business and are responsible for the qualifying criteria of that loan. The broker is responsible for making sure these loans meet the criteria for the secondary market. Once funded, if the loan can not be sold by the lender it becomes the brokers liability.

With the turn in subprime loans over the past year many of these lines of credit are being pulled back as lenders do not want to be subjected to the risk exposure. This means less mortgage brokers with the ability to fund loans through their own line of credit are now available and this will surely decrease in the future.

Popularity: 4% [?]