| Warehouse Lines of Credit |
9. Warehouse Lines of Credit
Warehouse lines of credit consisted of the following at September 30, 2020 and December 31, 2019. Changes subsequent to September 30, 2020 have been described in the notes referenced with the below table.
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Maturity
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September 30,
2020
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December 31,
2019
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$800 million master repurchase facility agreement (1)
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January 2021
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|
$
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499,216
|
|
|
$
|
456,225
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$250 million master repurchase facility agreement (2)
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August 2021
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146,259
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|
|
|
80,965
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|
|
$700 million master repurchase facility agreement (3)
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February 2021
|
|
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485,152
|
|
|
|
282,579
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|
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$200 million master repurchase facility agreement (4)
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June 2021
|
|
|
150,034
|
|
|
|
136,699
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|
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$299 million master repurchase facility agreement (5)
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September 2021
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|
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108,842
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|
|
|
148,149
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|
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$500 million master repurchase facility agreement (6)
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July 2021
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|
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349,308
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|
|
|
190,221
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|
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$200 million master repurchase facility agreement (7)
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|
April 2021
|
|
|
147,889
|
|
|
|
—
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|
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$75 million master repurchase facility agreement (8)
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February 2024
|
|
|
27,996
|
|
|
|
9,569
|
|
|
|
|
|
|
|
1,914,696
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|
|
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1,304,407
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Prepaid commitment fees
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|
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(2,435
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)
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(1,220
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)
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Net warehouse lines of credit
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|
|
|
$
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1,912,261
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|
|
$
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1,303,187
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(1)
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The variable interest rate is calculated using a base rate tied to LIBOR, the Eurodollar, or an alternative base rate, plus the applicable interest rate margin.
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(2)
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The variable interest rate is calculated using a base rate tied to LIBOR, plus the applicable interest rate margin. This line of credit requires a minimum deposit of $0.75 million.
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(3)
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The variable interest rate is calculated using a base rate tied to LIBOR, plus the applicable interest rate margin.
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(4)
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The variable interest rate is calculated using a base rate plus LIBOR, with a floor of 1.525%. This line of credit requires a minimum deposit of $1.1 million.
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(5)
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The variable interest rate is calculated using a base rate tied to LIBOR, plus the applicable interest rate margin. This line of credit was amended subsequent to September 30, 2020, decreasing the borrowing capacity to $299.0 million and extending the maturity to September 2021.
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(6)
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The variable interest rate is calculated using a base rate tied to LIBOR, plus the applicable interest rate margin.
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(7)
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The variable interest rate is calculated using a base rate tied to LIBOR, plus the applicable interest rate margin with a floor of 1.75%.
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(8)
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The interest rate on this facility is 3.375%. This facility was opened in 2019 and is used for GNMA delinquent buyouts. Each buyout represents a separate transaction that can remain on the facility for up to 4 years.
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The weighted average interest rate for warehouse lines of credit was 2.59% and 4.04% at September 30, 2020 and December 31, 2019, respectively. All warehouse lines of credit are collateralized by underlying mortgages and related documents. Existing balances on warehouse lines are repaid through the sale proceeds from the collateralized loans held for sale. The Company intends to renew existing warehouse lines prior to expiration. If those lines are not renewed or replaced, that could have a negative impact on the Company’s ability to continue funding new mortgage loans. The Company had cash balances of $156.2 million and $68.2 million in its warehouse buy down accounts as offsets to certain lines of credit at September 30, 2020 and December 31, 2019, respectively.
The agreements governing the Company’s warehouse lines of credit contain covenants that include certain financial requirements, including maintenance of maximum adjusted leverage ratio, minimum net worth, minimum tangible net worth, minimum current ratio, minimum liquidity, positive quarterly income and limitations on additional indebtedness, dividends, sale of assets, and decline in the mortgage loan servicing portfolio’s fair value. At September 30, 2020 and December 31, 2019, management believes the Company was in compliance with all debt covenants.
The Company has an optional short-term financing agreement between FNMA and the lender described as “As Soon As Pooled” (ASAP). The Company can elect to assign FNMA MBS trades to FNMA in advance of settlement and enter into a financing transaction and revenue related to the assignment is deferred until the final pool settlement date. The Company determines utilization based on warehouse availability and cash needs. There was no outstanding balance as of September 30, 2020 and December 31, 2019.
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