RT Journal Article
SR Electronic
T1 Financing Mortgage Loans with Extendible Note Funding Facilities
JF The Journal of Structured Finance
FD Institutional Investor Journals
SP 62
OP 68
DO 10.3905/jsf.2004.443362
VO 10
IS 3
A1 Jon Van Gorp
A1 Laura Turnquest
YR 2004
UL https://pm-research.com/content/10/3/62.abstract
AB Traditionally, mortgage loan originators relied on credit lines from commercial banks for short-term funding while aggregating portfolios of mortgage loans to sell or securitize. Recently, however, an increasing number of the largest non-bank mortgage loan originators have established their own funding conduits that allow them direct access to the capital markets. A single-seller mortgage loan warehouse funding facility (“Single Seller Facility”) functions without the use of commercial credit facilities or back-up liquidity lines by issuing extendible, asset-backed commercial paper notes. This article examines a typical structure for a Single Seller Facility; some of the related structural issues such as types of notes and related liquidity features, liquidity and interest rate protection, credit enhancement, structural protections, and taxable mortgage pool issues; benefits to the issuer/sponsor of establishing this type of facility; and how this market may develop in the future for other financial assets.