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Warehouse Lending - LoanUniverse Community

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Warehouse Lending


2 replies to this topic

#1 Lindann

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Posted 24 November 2004 - 12:31 PM

I am looking for the definition of wet and dry lines.

#2 loanuniverse

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Posted 24 November 2004 - 06:42 PM

Before I give you my take, let me warn you that I am not an expert in warehouse lending. In fact, I am at least one year removed from having looked at one of these deals. None of my employers have managed a warehouse lending facility and their involvement has been that of a participant bank or member of a syndicate.

Having said that, my educated guess on the meaning of wet and dry lines goes back to the type of funding that can be had at the time that a residential mortgage loan is closed. In other words, a wet line means that the warehouse lenders advances the funds without having the original signed documents in its possession, while the dry line means that the warehouse lender advances the funds only after it has the documents.

As you can see there is more risk for the lender on a line that allows for “wet funding” than one that does not.

#3 Commercial Lender

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Posted 25 November 2004 - 09:53 PM

Admin is right. i.e thus the wet and dry closing. Dry closings are the norm in commercial.





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