In one sentence
A lender providing short-term financing to originators to fund loans before they are sold or securitized.
The longer version
Warehouse lines let originators fund loans without tying up their own capital, repaying the line when loans are sold to investors or into securitizations. The warehouse lender's collateral is the loans themselves.
Warehouse mechanics add a layer of collateral and reporting around origination that operates behind the borrower-facing deal.
Common questions
- What is a warehouse lender?
- A lender that provides short-term financing to originators so they can fund loans before selling or securitizing them.
- How does warehouse lending work?
- The originator funds a loan partly with the warehouse line, pledges the loan as collateral, and repays the line when the loan is sold.
- Why does a warehouse lender care about the closing file?
- Because the loans are its collateral. Missing or defective documents can make a loan ineligible to stay on the line.
Keep reading
- The commercial loan closing processThe five stages from term sheet to funded.
- Loan participations: a working guideLead and participant, document flow, ongoing obligations.
- How life companies run commercial mortgage operationsThe long servicing tail.
- Commercial loan softwareWhere this sits in the lending stack.