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Note: The content below about broker to broker is under review and still being developed.
WAREHOUSELINES OF CREDIT/MORTGAGE LENDERS/ESCROW AND CLOSING You had an internet website known as "AppOnline.com," affiliated with a licensed mortgage broker/banker known as "Island Mortgage Network, Inc." These entities maintained 57 branch offices in 20 states, having more than 900 employees.
The recent collapse of Long Island-based Island Mortgage has many of us wondering "What happened?" to warehouse lines and the other exact same products MBS group offers. In the middle of all this were a settlement service provider known as "National Settlement Services Corp." of Islandia, NY, and State Bank of Long Island. Island Mortgage chose National Settlement Services to handle disbursements for all (or substantially all) of its loans, and the disbursements by warehouse lenders were to be made by wherehouse lines of credit checks drawn against the account(s) of National Settlement Services at State Bank of Long Island. The MBS Group with warehouse lending specializes in providing warehouse lines of credit to existing and emerging mortgage bankers nationwide. A warehouse line of credit is a revolving line of credit. Money is borrowed on the line and added to your bottom line with a warehouse line of credit. Learn more about the warehouse lines of credit provied by MBS. We have the cash flow and credibility needed to make the leap. The involvement of National Settlement Services and State Bank have gotten attention because their actions, particularly during June 2000, caused many escrow/closing agents, title companies and borrowers to proceed with loan transactions for which there would never be funding. In other words, these actions appear to have delayed the commencement of bankruptcy, to the detriment of an enlarged group of victims.
Last July, these entities filed voluntary Chapter 11 bankruptcy in the face of court orders obtained by warehouse lenders "freezing" the entities' principal operating accounts; numerous lawsuits being filed by title companies and borrowers throughout the country, alleging that mortgage loans did not close or were not funded; and suspension of Island Mortgage's license by state banking authorities. At that time, warehouse lenders on a warehouse line claimed that more than $50 million had been diverted these entities' lines of credit and/or loan fundings. According to the first report filed by the Trustee in Bankruptcy, partial records of the Debtors obtained and examined as of late September disclose transfers one of the warehouse line of credit and more than $20 million from the Debtors' accounts for which there's no "apparent" legitimate purpose. And certain former members of senior management and a senior consultant are now taking the Fifth Amendment.
This has serious consequences for escrow/closing and title folk, many of whom are independent agents. Many face substantial losses from warehouse lines of credit in escrow/trust accounts, and from outstanding commitments to insure mortgages that weren't funded but are now held by "innocent" transferees. I think it's fair to assume that someone stole money--lots of it--from warehouse lines of credit, while representing to a warehouse line of credit lender that the loans for which funds had been advanced by the lenders were, in fact, funded, closed, and "in the pipeline" for sale to investors in the secondary market.
Jeffrey White has written an article titled "A Basic Guide to WarehouseLines of Credit," which appears in the latest issue of Mortgage Originator magazine. For me, the article sheds light on an important aspect of mortgage lending that you don't often see discussed in such detail. Recommended reading. To view the article, click on the URL below. It's important for us to understand how this happened, in order to handle existing claims and to protect ourselves in the future.
We invite you to read more about warehouse lending and our company on this site, and then click on this link for contacting MBS group directly. If you would like to learn more about how to obtain a warehouse line of credit please feel free to contact MBS.
Click Here for some basic questions answered about Warehouse Lines of Credit.
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