warehouse fee

warehouse fee

A charge to a borrower when a mortgage banker or other small lender must borrow money on a short-term basis in order to loan money on mortgage loans.If the interest rate on the short-term loan is too large to make money on the spread, the mortgage banker will charge a warehouse fee to cover its costs until it can assemble enough loans in its virtual warehouse and sell them to someone else,making enough money to pay off its short-term loans.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.