Warehouse Receivables & Warehouse Lines of Credit

9 Months Ended

Sep. 30, 2019

Warehouse Receivables And Warehouse Lines Of Credit [Abstract]

Warehouse Receivables & Warehouse Lines of Credit

4.	Warehouse Receivables & Warehouse Lines of Credit

Our wholly-owned subsidiary CBRE Capital Markets, Inc. (CBRE Capital Markets) is a Federal Home Loan Mortgage Corporation (Freddie Mac) approved Multifamily Program Plus Seller/Servicer and an approved Federal National Mortgage Association (Fannie Mae) Aggregation and Negotiated Transaction Seller/Servicer. In addition, CBRE Capital Markets’ wholly-owned subsidiary CBRE Multifamily Capital, Inc. (CBRE MCI) is an approved Fannie Mae Delegated Underwriting and Servicing (DUS) Seller/Servicer and CBRE Capital Markets’ wholly-owned subsidiary CBRE HMF, Inc. (CBRE HMF) is a U.S. Department of Housing and Urban Development (HUD) approved Non-Supervised Federal Housing Authority (FHA) Title II Mortgagee, an approved Multifamily Accelerated Processing (MAP) lender and an approved Government National Mortgage Association (Ginnie Mae) issuer of mortgage-backed securities (MBS). Under these arrangements, before loans are originated through proceeds from warehouse lines of credit, we obtain either a contractual loan purchase commitment from either Freddie Mac or Fannie Mae or a confirmed forward trade commitment for the issuance and purchase of a Fannie Mae or Ginnie Mae MBS that will be secured by the loans. The warehouse lines of credit are generally repaid within a one-month period when Freddie Mac or Fannie Mae buys the loans or upon settlement of the Fannie Mae or Ginnie Mae MBS, while we retain the servicing rights. Loans are funded at the prevailing market rates. We elect the fair value option for all warehouse receivables. At September 30, 2019 and December 31, 2018, all of the warehouse receivables included in the accompanying consolidated balance sheets were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities that will be secured by the underlying loans.

A rollforward of our warehouse receivables is as follows (dollars in thousands):

Beginning balance at December 31, 2018	$	1,342,468
Origination of mortgage loans		15,381,864
Gains (premiums on loan sales)		48,177
Proceeds from sale of mortgage loans:
Sale of mortgage loans		(15,738,623	)
Cash collections of premiums on loan sales		(48,177	)
Proceeds from sale of mortgage loans		(15,786,800	)
Net increase in mortgage servicing rights included in warehouse receivables		2,214
Ending balance at September 30, 2019	$	987,923

On September 30, 2019, we borrowed $376.7 million from our warehouse lines of credit to fund origination of mortgage loans scheduled to close on October 1, 2019. The transaction closed as scheduled and was recorded as a warehouse receivable on October 1, 2019. As a result, we had a $376.7 million advance warehouse funding, which has been included on a separate line item in the accompanying consolidated balance sheet at September 30, 2019.

The following table is a summary of our warehouse lines of credit in place as of September 30, 2019 and December 31, 2018 (dollars in thousands):

			September 30, 2019				December 31, 2018
Lender	Current Maturity	Pricing	Maximum Facility Size		Carrying Value		Maximum Facility Size		Carrying Value
JP Morgan Chase Bank, N.A. (JP Morgan) (1)	10/21/2019	daily one-month LIBOR plus 1.30%	$	985,000	$	476,382	$	985,000	$	871,680
JP Morgan (1)	10/21/2019	daily one-month LIBOR plus 2.75%		15,000		—		15,000		—
Capital One, N.A. (Capital One) (2)	7/27/2020	daily one-month LIBOR plus 1.25%		200,000		171,731		325,000		120,195
Fannie Mae Multifamily As Soon As Pooled Plus Agreement and Multifamily As Soon As Pooled Sale Agreement (ASAP) Program (3)	Cancelable anytime	daily one-month LIBOR plus 1.35%, with a LIBOR floor of 0.35%		450,000		209,741		450,000		149,089
TD Bank, N.A. (TD Bank) (4)	6/30/2020	daily one-month LIBOR plus 1.15%		800,000		84,301		400,000		165,945
Bank of America, N.A. (BofA)	5/27/2020	daily one-month LIBOR plus 1.20%		350,000		332,130		—		—
BofA	5/27/2020	daily one-month LIBOR plus 1.15%		250,000		45,000		200,000		—
BofA	6/4/2019	daily one-month LIBOR plus 1.30%		—		—		225,000		21,852
MUFG Union Bank, N.A. (Union Bank) (5)	6/28/2020	daily one-month LIBOR plus 1.20%		350,000		29,325		—		—
			$	3,400,000	$	1,348,610	$	2,600,000	$	1,328,761

(1)	Effective October 21, 2019, we amended this facility which extended the maturity date until October 19, 2020.

(2)

During 2018, the maximum facility size was temporarily increased to $325.0 million and reverted to $200.0 million on January 31, 2019. The line was then temporarily increased from $200.0 million to $700.0 million effective February 27, 2019. The maximum facility size reverted to $200.0 million on April 1, 2019. In July 2019, this $200.0 million line of credit was renewed with terms that included an interest rate of daily one-month LIBOR plus 1.25% and a maturity date of July 27, 2020.

(3)	The maximum facility size was temporarily increased from $450.0 million to $600.0 million effective September 9, 2019. The maximum facility size reverted to $450.0 million on September 30, 2019.

(4)

Effective July 1, 2019, this facility was amended with a revised interest rate of daily one-month LIBOR plus 1.15% and a maturity date of June 30, 2020. Effective August 1, 2019, this facility contains an accordion feature which provides for a temporary increase to $800.0 million, if needed, that will expire on February 1, 2020. To date, the temporary increase has not been requested.

(5)

On June 28, 2019, we added a new warehouse facility for $200.0 million with Union Bank. This facility contains an accordion feature which allows for temporary increases not to exceed an additional $150.0 million. If utilized, the additional borrowings must be in predefined multiples and are not to occur more than three times within a calendar period. Since inception, no short-term temporary increases have been requested.

During the nine months ended September 30, 2019, we had a maximum of $2.5 billion of warehouse lines of credit principal outstanding.