Content area
Full Text
Washington-Thanks to the shakeout in the subprime market, warehouse lenders are once again dictating the rules of the game to their mortgage banking customers. Moreover, many warehouse executives say the business, in general, looks good even though some banks are still smarting from losses taken on an $850 million line of credit made to B&C lender United Companies, Baton Rouge, which filed for bankruptcy protection last month. (See related story, page 1)
"The A' paper warehouse business is fundamentally a good business," said Paul Best, senior vice president of PNC Bank, Louisville, Ky. "However, we're taking a harder line on B&C sub-limits."
A sub-limit allows a lender to use a certain portion of its warehouse proceeds for non-conforming loans.
"We're a lot more restrictive on takeout sources," noted Mr. Best. "We're requiring lenders to have commitments (to...