Legal Definitions - mortgage warehousing

MORTGAGE WAREHOUSING

Mortgage warehousing is when a mortgage company holds onto loans that they plan to sell later at a lower price.

For example, let's say a mortgage company lends money to someone to buy a house. Instead of keeping that loan on their books, they sell it to another company for a lower price. The mortgage company can then use the money they get from selling the loan to make more loans to other people.

Another example is when a mortgage company wants to bundle a bunch of loans together and sell them as a package to investors. They might hold onto those loans for a little while until they have enough to make a big package.

Mortgage warehousing is a way for mortgage companies to make money by buying and selling loans. They can hold onto loans for a short time and then sell them at a lower price to make a profit. This allows them to make more loans to other people and keep the money flowing.