Commonly asked questions

What lending guidelines are required in this program?
Specific lending guidelines will vary for different participants. Generally accepted collateral includes:

• Stated-income, stated-asset and equity-based loans
• Fallout loans
• Subperforming loans
• Loans originated outside of investor guidelines
• Loans lacking mortgage insurance, Federal Housing Administration insurance or U.S. Veterans Administration guaranty
• Commercial loans
• Multifamily or mixed-use-property loans
• High loan-to-value loans
• Land loans, seasoned loans and private notes
• Nonperforming loans
• Real-estate-owned (REO) property

What costs will my company incur? Will I be required to pay transaction costs?
The permanent warehouse program typically covers all transaction costs, leaving the mortgage company with only the cost of its legal counsel. In addition, using a legal counsel experienced in these transactions will expedite the process and allow most lenders to use the program in 30 days.

Are there limits to the volume of loans originated under this program?
There are no limits to the volume of loans the lender can originate. As a program participant, the lender can fund for an unlimited loan volume, on- or off-balance sheet.

Permanent warehouse financing can be effective as a supplemental or primary funding source for an origination program. In addition, because it enables lenders to originate an unlimited loan volume, permanent warehouse financing eliminates the need to manage multiple sources of capital. This helps lenders to focus on core business.

As with any financial strategy, the right decision demands careful consideration. For mortgage companies seeking to grow while stabilizing their business model or looking for better financing options, this approach could be just the solution they need.

David Ertel is CEO of Bayview Financial LP, an $8 billion finance company that offers permanent warehouse financing. Bayview specializes in purchasing residential- and commercial-real-estate loans, originating small-balance commercial-real-estate loans, investing in real-estate assets and providing 1031 exchange services. Bayview is now the second-largest financial institution headquartered in Florida, with more than 1,200 employees. For more information, visit the company’s Web site at www.bayviewfinancial.com or call (866) BAY-VIEW (229-8439). This article does not constitute an offer or solicitation of an offer to purchase or sell securities.

Page: 1 2 3 Previous