Broker2Banker Mortgage Banking in a Nutshell

Getting Started: Broker2Banker 101

When you table fund a loan, you add premiums owed to your company and subtract fees and costs owed to the investor. A warehouse line follows a similar procedure: filling out a funds request form, writing a check (or providing wire instructions) to the title company or settlement agent, less any fees owed to you from the borrower. Essentially, you’re performing the same function that an investor’s table funding department does when it issues a check for your table funded transactions.

So, how does that make you more money? When you issue the check, you will back out all fees being charged to the borrower–which might include a processing fee, a document preparation fee, an origination fee or a discount point–but not necessarily owed to the investor.

Are you qualified? Warehouse banks will require audited financial statements from you to demonstrate the minimum net worth required to establish a warehouse line of credit.  An applicant must maintain this minimum requirement during the time the line is open.  Warehouse banks will typically consider a debt-to-net-worth ratio of 10 to 1 when approving the amount of your warehouse line, dependent on the financial strength and track record of your company. With an audited net worth of $500,000, for example, the maximum warehouse line would be $5,000,000–which should be adequate to fund $10,000,000 in mortgage closings each month–based on constantly moving loans off your warehouse line.

Want to learn more? Want to get started? Apply Today!