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October 26, 2020

Christy Moss, CMB, and Ken Logan, CMB: Reps and Warrants Relief Key to IMB Liquidity Strategies (MBA Newslink)

Our industry’s historic boom cycle promises to keep lenders on their toes well into 2021, creating growth opportunities that could catapult some to new heights of market dominance and even to IPOs. That said, there is more to spinning today’s volume into gold than efficiently originating high quality loans. For independent mortgage banks, the name of the game is liquidity. Lenders with an eye and a taste for transformative growth are equally attentive to their liquidity strategies, including how their origination practices impact liquidity now and after the current cycle ends.

Specifically, one key aspect of liquidity management relates to the “come from behind” type risks. One of the largest of these unexpected claims on cash has historically been repurchase and indemnification demands, most particularly directly and indirectly from the GSEs, and usually months or even years after loans are sold into the secondary market.

Read the full article in MBA Newslink.