Can somebody explain the role of a Warehouses Lender? (within the IBD CMBS group)
I have an upcoming interview for this position and I still don't know too much about it.
Does this opportunity align with FSG or Corporate Banking in terms of skill-set, hours, and exposure?
Thank you for your guidance!
Early bump.
Warehouse lending is essentially lending to a non bank lender who is borrowing money to fund loans temporarily before selling those loans into the capital markets. As opposed to lending money to non bank lenders who would hold the loans to maturity. Warehouse lending is primarily focused on making sure the non bank lender is making loans that would ultimately be purchased by the capital markets, and as long as that is the case, the advance rates, interest rates and covenants tend to be more favorable than lender finance to portfolio lenders.
Appreciate that! Thanks!!
So if I understood you right, a Wholesale Lender underwrites from it's balance sheet to a Direct Lender, who in turn underwrites with intension of selling these securities into the Capital Markets.
If you happen to know, does the modeling exposure, pay and/or hours compare to FSG or CB? I'm still quite junior, and although burnt out from IB, I worry about the famed Pigeonholed term. Also, would you say this opportunity compares to CMBS Origination?
If it's who I think it is, they split it into 3 functions (plus ops) - RMs who handle the relationships, facility mods, and new biz, UW which underwrites the clients (lenders) and 're-underwrites' the loans that get put on the line, and then AM which monitors the underlying loans' performance, likely quarterly.
RM is most similar to traditional commercial banking, UW has similarities to CRE UW. AM is the most pigeonholed, as it is pretty similar to CRE AM, which is hard to break out of.
Moving from this to Corp or IB is very unlikely, you’re not doing that kind of modeling. You’d be moving into CRE lending/UW type roles, but less transferable since you aren’t structuring the loans directly.
FYI, CRE Warehouse Lending falls under IB in every single one of the BBs
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