Warehouse Lines and Non-Delegated Correspondent Programs
Would you like to earn more on every loan you close?
Would you like the advantage of closing loans as a lender in your Company name?
Would you like the ability to not disclose your total earnings on your loans?
We are marketing partners for three separate warehouse lenders.
Warehouse lines from $1.0 million to $10 million
Easy fast approval process
No application fee
Priced at WSJ prime with $150 per loan charge
99% advance rate
$5,000 reserve account established (Put in place in case there is loan impairment)
Warehouse lines from $5.0 million to $20 million
More in-depth approval process with emphasis on earnings and liquidity
$450 application fee. Refunded if line approved at funding of 3rd loan
Priced below WSJ prime with $200 per loan charge (May be $150 for larger lines)
100 % advance rate for all “A” paper loans and 98% for all Alternative “A” loans
Reserve account of $5,000 per million of line
This provider has an exceptional non-delegated correspondent program including an excellent jumbo arm program.
Warehouse lines from $3.0 million to $100 million
Streamlined approval process
No application fee
Priced below WSJ prime with $75 per loan charge
100% advance rate
Each of the warehouse line providers that we perform marketing for, have different guidelines but each of the providers looks at the same criteria when evaluating lender applications for approval:
Documentation Requirements- Warehouse line providers are making a significant commitment when they grant a warehouse line. Don’t be shocked when you see the listing of documents required for approval. All of them require a comprehensive listing of information on the applicant.
Preparation of Financials-Most providers require that year-end financials are audited. Our provider for lines up to $5 million will allow unaudited financials. All lines over $5 million will require the applicant to have audited year-end financials.
Net Worth of Company- Most warehouse lenders require applicants to have a minimum net worth that may be expressed as a percentage of the line being requested. We can provide lines as small as $1,000,000. That provider has a minimum net worth of $75,000. As the requested line amount increases, the providers require a higher net worth. $10 million lines generally require a net worth of $500K
Liquidity– Providers want to make sure that the applicant has the ability to deal with problem loans so they want to see a balance sheet with liquidity (cash and cash equivalents). They may require a minimum of 30% of the applicant’s net worth in liquid assets or 5% of the line amount for larger lines.
Profitability– Providers want to see three years of profitability unless there are explainable reasons for the losses or the applicant has a significant balance sheet with adequate liquidity.
Production and Sustainable Business Model– Providers want to make sure that they are granting lines to Companies that will utilize the lines. To obtain a $1 million line, the applicant should be closing $2.0-2.5 million a month. Providers also want to know that you have a business model that is sustainable; I.E. a model that is not just dependent upon refinances.
Guarantor Financials– Providers require owners of 10% or more of the applicant to sign as a guarantor. The guarantor’s financials ( Personal Financial Statement and Tax Returns) and credit can aid in the approval or can keep the application from being approved.
Management and Time in Business– Providers look for applicants that have been in the business for some time (Typically at least 3 years) and they want to see expertise in more than just originating loans. The resume’s submitted on the management team are important.
Operational Capability– When you move from a broker to a banker, there are different operational functions that must be handled. The providers expect there to be a plan in place to handle those functions .(See comments below)
The Role We Play
Below are the functions that we perform in the process:
Marketing– We market the program and work with prospects to determine the amount of line needed and the best program option.
Application Assistance– Warehouse providers are granting significant loan amounts to the lender and there is a certain level of risk to the transaction so it is not surprising that they will require significant documentation. WNC assists you in the preparation of the application package and supporting documents. We know what the lenders are looking for and assist you in presenting the package that has the highest chance for approval.
Negotiation of Terms-We assist you in negotiating the best terms possible with the provider(s)
Operational Assistance– WNC has established relationships with quality third-party service providers that specialize in handling the loan closing, warehousing, and post-closing processes on a contract per loan basis. All of the warehouse line providers are comfortable with ur service provider. Where needed we can assist you in developing an efficient workflow that incorporates interaction with the service provider and the warehouse line provider.
We have developed a process that has been proven over time. Our process has been designed to identify warehouse line requests that cannot be approved before the lender goes to the trouble of putting together a complete package.
Completion and Review of Warehouse Line Request Form– We start with the completion of this simple form and the submission of it and a few spefici financial documents. From this we can determine what your options are and the chance of success in submitting an application
Warehouse Line Application and Checklist– We will send you the Application for the appropriate provider and a checklist of documents that are required for submission.
Workflow Analysis and Third Party Service Provider Integration- Prior to application submission, we work with the applicant to make sure that all the closing and warehousing functions are covered and there is coordination between the applicant and the third party service provider.
Application Submission- We will submit the appalication and supporting documents on behalf of the applicant and convey any additional requests from the provider.
Negotiation of Terms- Once the provider has approved the application and delivered terms, we work with them to see if there is an opportunity for improvement of terms.
( Applicants do not pay WNC anything as we are compensated by warehouse line providers for our marketing efforts)