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Bank Liquidity and Financing of Nonbank Mortgage Companies, No. 25-33

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Bank Liquidity and Financing of Nonbank Mortgage Companies, No. 25-33

DATE: August 2025

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ABSTRACT:

Nonbank mortgage companies (NMCs) have become increasingly important players in the mortgage market. These intermediaries finance their assets — mortgages held for sale (MHFS) and mortgage servicing rights (MSRs) — with warehouse lines of credit. This type of funding provides contingent liquidity during the short period between the origination of a mortgage and the sale or securitization of such an asset in the secondary market. The main providers of warehouse lines of credit are a handful of large banks with average assets of $100 billion.

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te Kaat, Daniel Marcel , Rebucci, Alessandro , Sapriza, Horacio, 1974- and Sclip, Alex. "Bank Liquidity and Financing of Nonbank Mortgage Companies, No. 25-33," Economic Brief (August 2025). https://fraser.stlouisfed.org/title/6034/item/700761, accessed on January 6, 2026.

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