Warehouse line information

About a warehouse line:

Once the loan closes, the closing agent delivers the original note to the warehouse lender while the rest of the closing documents go to the mortgage banker. A warehouse line of credit is a revolving line of credit. Money is borrowed on the line and wired directly to the closing agent to fund the loan. When the investor is ready to purchase the loan, you request the warehouse lender to ship the original note to the investor under a “bailee” letter. You, the mortgage banker, assemble the closed loan package and deliver the file to an investor for purchase. Proceeds are then deposited into your bank account maintained by the lender, to which you have access. The cycle then starts over on the next loan. When the investor purchases the loan, proceeds are wired directly to the warehouse lender and the advances on that particular loan are repaid, net of applicable charges and file fees.

Benefits of a Warehouse Line:

• Control – You will no longer have to wait for your wholesaler to draw loan documents for you. You will be able to control the scheduling of your loan closings and deliver on the promises you make to your clients.
  
  Customer Retention – As a mortgage banker and one who uses a warehouse line of credit, you will be able to draw your own loan documents, in your own company’s name. Since the loan documents are in your name, your customers will identify you as the lender.
  
  
• Generally Better Pricing for Your Loans – Investors may pay you a premium for your closed loans over your brokered or table-funded loans.
  
  
• Yield-Spread Premium Disclosure – This is because a warehouse-funded loan is considered a secondary market transaction and the profits recorded from the sale are not required to be reported on the HUD-1. When you use a warehouse line of credit to fund your loans, you will no longer be required to disclose to your borrowers the yield spread premiums (rebate pricing) you receive from your investors.
  
  Contact the MBSD Group today about a warehouse line.

Warehouse lines of credit by the MBSD Group

"Dividend elimination signals a potential cash-flow crunch," said Lehman Brothers analyst Alan Rifkin in a research note. "We believe that Pier 1 Imports' dividend was one of the few positive signals of stability, given Pier 1's deteriorating performance over the past four years." By warehouse lines of credit Pier 1's thinking, however, taking out the dividend leaves more money to shore up its finances for a quicker turnaround. With the strategy struggling, the company is also finding itself inching closer to a cash crisis that has some observers now seeing little promise of a rebound in the foreseeable future.

But what Girouard didn't say was disclosed in the latest quarterly filing with the Securities and Exchange Commission. Marvin Girouard, the chief executive and 32-year Pier 1 veteran (who said over the weekend that he will take retirement at the end of the fiscal year in February), insisted in a statement Tuesday that Pier 1's "cash on hand, available lines of credit and proceeds from the sale of the credit-card business will be sufficient to meet our expected cash requirements over the next fiscal year." Much of the money the company is using to stock merchandise, make payroll and cover lease expenses is coming from available lines of credit and the $155 million in net cash proceeds from the sale of its proprietary credit-card division, while warehouse lines burns through what little cash it has left. Pier 1 Imports did not return a phone call seeking comment. That's because it's not generating any cash from the couches and candles that it sells. Pier 1's annual dividend growth rate of 23.36% comes amid a meager 4.7% revenue growth rate and an earnings growth rate of zero -- resulting in an average 0% yield over the same period, according to the company.

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Contact the MBSD Group today for all your warehouse banking needs.