Warehouse Lenders See Good Reason to be Bullish on HECMs

Origination News is reporting that warehouse lenders speaking at the Mortgage Bankers Association’s National Secondary Market Conference were bullish on funding HECM loans.

HECMs are a nice piece of business for Texas Commercial Bank, said Jack Nunnery, senior vice president of the bank. He said Texas Commercial is committed to providing financing for those loans, as reported by Origination News. He also noted that liquidity is good in the marketplace for reverse mortgage loans and that secondary market execution is coming back to a level of normalcy.

Another conference speaker, Elaine Batlis, senior vice president, warehouse lending manager at Silvergate Bank, said there are a number of strong secondary market investors for HECMs, which makes them a good product from a warehouse lender perspective. According to the Origination News report, during her presentation, Batlis said that for any loan product originated, warehouse lenders would like to see lenders have multiple exit strategies.

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The MBA secondary market conference is going on this week in New York City.

Read the Origination News article.

Written by Elizabeth Ecker

 

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  • Banks providing warehouse lines for HECM lenders should have little concern about the collateral. The ratio of balances due to values of underlying collateral is extremely low for mortgages. If the lender is solvent and has sufficient equity, the bank providing warehouse lines should be in great shape looking for as much product as it can provide funds for. What a great operation, short-term transactions with good returns and strongly collateralized mortgages. As long as the lender is strong and there is a strong secondary market for the product, where can the warehouse entity go wrong? Its like a cash machine and should be.

  • Great to see warehouse lending support the HECM product and lenders. Another step up the ladder of progress here would be to see lenders willing to provide liquidity for HMBS-securitized loan advances and buyouts.

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