As record profits in mortgage warehouse lending attract lenders and investors, concern is mounting through the lending community regarding new entrants that lack warehouse lending experience. It is important that new entrants as well as seasoned participants understand the controls that must be established relating to common business practices and safety and soundness guidelines that are critical to loss mitigation and profitability in warehouse lending. Given the fundamental changes that have taken place in the mortgage industry, organizations must demonstrate to management and other relevant stakeholders that their operating model can effectively manage the operational risks associated with their business.

In the following piece, we guide you through the oversight process, the credit approval process, risk assessment and controls, the warehouse loan management system and the surveillance process, followed by our key takeaways for achieving efficiencies, as well as areas in which A&M can help.