Other Information
Warehouse lending can be differentiated between 'wet funding' and 'dry funding'. The difference is related to when the loan originator gets his funds with respect to the time at which the real estate transaction takes place. During 'wet funding' the mortgage loan provider gets the funds at the same time as the loan is closed, i.e. before the loan documentation is sent to the warehouse credit provider. 'Dry funding' takes place when the warehouse credit provider gets the loan documentation for review before sending the funds.
An important aspect of the warehouse credit providing business is limiting fraud on warehouse lending. Main risks of fraud include dishonest and collusive mortgage loan originators, title companies, real estate agents and customers themselves, false information in the loan application (especially appraisals), forged signatures on the loan documents, and false documents of title. The 'Wet funding' type of warehouse credit is riskier in terms of possible fraud because the credit provider will not be aware of any potential problems until after the funds are sent to the loan originator. Measures that the warehouse lender can take to limit fraud can be a strong screening process for mortgage brokers and mortgage banking companies, making sure the loan originator itself has a strong internal screening process, limiting the amount available for 'wet funding', and having separate account for funds coming from sale of loans to investors.
Read more about this topic: Warehouse Line Of Credit
Famous quotes containing the word information:
“Many more children observe attitudes, values and ways different from or in conflict with those of their families, social networks, and institutions. Yet today’s young people are no more mature or capable of handling the increased conflicting and often stimulating information they receive than were young people of the past, who received the information and had more adult control of and advice about the information they did receive.”
—James P. Comer (20th century)
“The information links are like nerves that pervade and help to animate the human organism. The sensors and monitors are analogous to the human senses that put us in touch with the world. Data bases correspond to memory; the information processors perform the function of human reasoning and comprehension. Once the postmodern infrastructure is reasonably integrated, it will greatly exceed human intelligence in reach, acuity, capacity, and precision.”
—Albert Borgman, U.S. educator, author. Crossing the Postmodern Divide, ch. 4, University of Chicago Press (1992)