ResCap Expanding Warehouse Lending, Jumbo Loans

April 21, 2009 No Comments »


The GMAC Bank unit of Residential Capital is expanding its warehouse lending operations, according to a spokesman who talked to

That same spokesman said the bank, which aggressively raised capital via high-paying savings accounts, wants to significantly increase its warehouse lending volume to meet the current strong demand.

At the moment, GMAC Bank has about 150 warehouse clients and is looking to take on more at a time when mortgage bankers are scurrying for funding.

In early April, it was reported that Wells Fargo was getting back into warehouse lending after a five-year absence to take advantage of the gap in the market.

Warehouse lending provides short-term funding to smaller, independent mortgage bankers (many former mortgage brokers) so they can compete with the likes of larger depository banks and lenders.

The Mortgage Bankers Association said warehouse lending capacity has fallen to just $20-$25 billion from $200 billion in 2007, prompting opportunity.

ResCap has also expanded its jumbo loan offerings via its Ditech brand, though borrowers need credit scores of 700 or higher and a down payment between 20 and 30 percent.

In late March, Bank of America said it was rolling out a new jumbo loan program for loan amounts between $730,000 and $1.5 million, with 30-year fixed mortgage rates beginning in the upper five-percent range.

The jumbo-conforming spread continues to be much wider than it has been historically, with conforming loans pricing one-and-a-half percent lower than jumbo loans, if not more.

This is all big news for ResCap, which just months ago looked like it was on its way out after closing 200 retail mortgage locations and halting its wholesale lending operation Homecomings Financial.

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