There are signs credit unions have begun to organize themselves to meet their and members' needs for temporary mortgage finance. It's called warehouse financing.
Warehouse financing in general refers to financing to help the flow of manufactured goods or raw materials, which usually were held as collateral for the financing, often in a warehouse. Warehouse financing in real estate refers to a procedure whereby a credit union, bank or other lender will use a line of credit from another institution temporarily to fund a mortgage they intend to sell on the secondary market. The funder has a collateral interest in the mortgage until it is successfully sold on the secondary market and the loan originator retains funds to issue another mortgage.
Before the current economic and housing crisis, warehouse lines of credit were not hard to find and were often offered by corporate credit unions. But after the crisis began, warehouse lines of credit frequently disappeared, leaving some credit unions unable to issue as many mortgages as quickly as they would like and leaving some mortgage CUSOs in the same boat.
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