Mortgage Banking, Brokerage and Warehouse Lending

In today’s economic environment, NVC believes that an established, but relatively new, residential mortgage banking and brokerage entity, possessing a number of state licenses and an existing multi-million dollar warehouse line of credit, will thrive. A well managed mortgage banking and brokerage entity that has been in operation for only the past 18 – 24 months will not be saddled with the indemnifications and buybacks that have impacted other mortgage banking concerns as a result of the lax and/or imprudent lending standards employed earlier on. And, a licensed mortgage banking operation with an approved warehouse line of credit can originate its own loans. With the application of prudent lending guidelines, such an entity can write higher quality loans, including conventional loans, which are agency backed and more marketable, and FHA loans, which are insured by the government and earn higher premiums in the secondary market. Moreover, such an entity can retain the highest quality loans (i.e., high credit borrowers and low loan-to-value ratios) for its own portfolio of loans, enabling it to earn interest income and service fees.

As a result of its foresight, NVC has acquired a majority interest in GMI Home Loans LLC , a mortgage banking and brokerage entity.

Additionally, NVC established a warehouse lending facility, providing much-needed capital to fund the origination of new mortgages for commercial and residential real estate buyers alike, which generated a steady, relatively secure source of current income.

Specialty Lending

NVC’s involvement in the real estate arena also extends to the provision of secured funding for nearly completed commercial and residential construction projects. In view of the current economic environment, many late stage projects have stalled because of the inability of developers to obtain funding. These “specialty loans” fall outside of conventional lending practices and are only considered on a very selective basis. Such loans are issued on a short-term basis (6 – 12 months), earn high interest and require a balloon payment at the end of the term. Although a number of factors will go into the consideration of writing such loans, only those scenarios with very low loan-to-value ratios, providing a higher equity position in the collateral, are considered, thereby minimizing risk.