Cincinnati-based Fifth Third Bank has launched a new business to provide warehouse financing to nonbank mortgage lenders, according to a news release.
The bank's new business will lend to nonbanks that make or bundle together residential mortgage loans, giving them temporary liquidity through a "warehouse" until they can sell the loans in the secondary market.
Donnie Martin, a 25-year veteran of the mortgage industry, will be leading the Dallas-based team for the $207 billion-asset bank.
The team's addition comes as higher interest rates have battered mortgage lenders, drastically slowing homeowners' appetite to refinance and potentially dampening some purchase activity. In recent months, nonbank lenders such as Rocket Mortgage and loanDepot have
The bank said its tech platform will give clients "efficient, same-day funding" that integrates with their existing processes.
"The quick fulfillment, together with a broad product offering, provides the tools necessary for mortgage bankers to succeed in a fast-paced, ever-changing industry," the bank said in a press release.
The bank also works with mortgage lenders through its correspondent lending group, loan trading desk and its treasury management team.
Martin, the head of the new team, has been at Fifth Third since last year and previously was director of warehouse lending at Texas Capital Bank, according to his LinkedIn profile. He also has worked at JPMorgan Chase.
Banks' mortgage warehouse businesses have "seen fierce competition given high scalability and historically benign credit risk," Jefferies analyst Ken Usdin wrote in a note to clients this week. New York-based Signature Bank, for example,
The spring home selling season helped lead to an uptick in warehouse lending volumes during the second quarter, Usdin wrote, but they will likely fall in the coming weeks since they "closely track" origination forecasts from Fannie Mae. The latest forecast shows originations should fall 45% this year and 7% in 2023, Usdin wrote.
