Warehouse lines of credit by the MBSD Group

MBSD Increases Mortgage Warehouse Lines

MBSD temporarily increases warehouse lines of credit to support strong mortgage and home equity loan volume

TEXAS - August 28, 2006 - MBSD, an online lending company, today announced that it has temporarily increased its warehouse lines of credit capacity from $370 million to $575 million.

MBSD temporarily increased its warehouse line of credit with Greenwich Capital Financial Products from $300 million to $425 million. The increase will remain in effect through November 26, 2005. MBSD also temporarily increased its warehouse line of credit with Warehouse Bank, a unit of GMAC Bank, from $70 million to $150 million. The increase will remain in effect through October 15, 2008.

The warehouse lines of credit are available for borrowings for interim financing of mortgage and home equity loans and are collateralized by MBSD's mortgage and home equity loans held-for-sale. MBSD uses warehouse credit facilities to fund its mortgage and home equity loans prior to their sale to capital market loan purchasers, which typically occurs within 30 days of funding. MBSD actively manages its warehouse line requirements to ensure sufficient production capability while minimizing the costs associated with additional line capacity.

"We temporarily increased our warehouse lines to support our current production requirements," , MBSD's Chief Financial Officer. "The additional capacity enables us to meet the demands of our growing purchase mortgage and home equity businesses and the favorable refinance mortgage interest rate environment."

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Warehouse lines with bankers

Warehouse lines of credit for bankers

Nowhere has the notion of change been felt more dramatically than our industry's unprecedented dependence on the independent, autonomous mortgage originator as a source for mortgage product like warehouse lines of credit. Is this the right time for you to start on the road to becoming a mortgage banker? A thoughtful measure of the pros and cons will provide an answer.

An impressive example of this transformation is the ability of even modestly sized originators to achieve correspondent status - and the accompanying premiums - provided they have the means to fund and close loans in their own name. One very significant consequence of this recently formed dependence is that warehouse line opportunity once reserved for a privileged few are now accessible to a far broader spectrum of the mortgage origination community than would have ever been thought possible only a few years ago.

As the traditional middle-market mortgage bankers have been either bought, merged or acquired by the large national conduits, warehouse lenders are keenly aware of the increasingly significant role that smaller, independent originators are playing in generating both commercial and residential mortgage loans.

As the millennium approaches, increasing numbers of brokers are heeding the call and becoming bankers by obtaining warehouse lines of credit. Competition for MBSD warehouse outstandings is fierce and consequently, this long-neglected segment of the origination market has become the latest battleground for warehouse lenders.

As warehouse lines is a pre-requisite to making this step it needs to deliver the benefits - as promised - once you sign on the dotted line. The purpose of this article is therefore to highlight the critical issues that should be given consideration prior to making a decision to step from broker to banker.