Table Funding: How does it work and why is it so popular?

Jessica
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In the competitive market place of mortgage lending, table funding plays a key role to establish a level playing field for the small loan originators. This form of wholesale lending has been designed in response to the market conditions and the requirements of the loan originators. Table funding can indeed be beneficial for the small firms who either do not possess a warehouse credit line or whose credit line is too small to handle their loan pipelines. With the help of table funding small firms can restore their identity in the competitive local market.

Recognizing the role of mortgage brokers in the mortgage industry, table funding is offered to the mortgage brokers to originate, process and close loans in their names. Though mortgage brokers can process and select loans but at the time of settlement they transfer the loans to the lender.

Here, it is to be noted that table funding is not applicable for all the states in the country. This practice is applicable in wet states only. Wet states are those states which have Wet Settlement laws, which require the lending banks to pay out the funds within a period of time.


There are HUD laws pertaining to table funding--some of which can affect table funding adversely. As per Real Estate Settlement Procedures Act disclosure regulations, borrowers are to be informed about such payments to broker made as servicing released premiums which brokers are not in favor of.


Last updated on January 20, 2013

Latest Community Discussions
Please explain what is table funding and wet funding? which one does CA belong to?

posted on 2010-12-01 09:51:23
I am in Texas but closing a loan in Tennessee. Is it Tennessee law that we must table fund?

posted on 2010-09-15 14:05:43
do you need a lenders license to table fund loans in florida?

posted on 2010-07-19 13:25:12
Are certain states required to be table funded?

posted on 2010-05-28 14:30:37
Is table funding just like best efforts

posted on 2010-04-07 12:34:53


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Category: Mortgage Basics
posted on 2012-01-18 08:50:21



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Mini Profile  blue

blue


Joined: 21 Oct 2005
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Post     Post subject:

Hi Laura,

Welcome to Mortgagefit discussion board.

Table funding is an option which allows brokers approved for Wholesale Traditional Lending to originate, process and close loans in their name. But at the time of settlement, the loan is transferred to the lender. And the lender simultaneously advances funds for the loan. This option meets the needs of brokers who want to maintain good customer relationship by closing loans in their own name.

Do let me know if you have any other questions.

Thanks
Blue
Goldman Bennett


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Post     Post subject:

Table funding has grown at fast pace as more and more lenders have discovered that brokers provide an important role in the whole loan process because of their specialization as loan originators.
Mini Profile  helping_user

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Hi Laura,

Table funding is applicable in wet states only. Wet states are the states having Wet Settlement laws, which is require lending banks to pay out the funds within a period of time (some how within 2 days of closing). This law is in place to reduce the practice if delaying funds after closing the documents.

Thanks
Mini Profile  Caron

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Post     Post subject: RE: table funding

Table funding is a process of originating loans with internal capital of a mortgage company or the lender till there is sufficient number of loans to package them for being sold into the secondary market. Sale of the package of loans allows the lender to recover the capital invested for lending.

Recent guidelines set up by the accounting industry encourage table funding. Lenders are allowed to amortize servicing-released premiums paid to originators.
Trudeau


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There are HUD regulations which can affect table funding; some see it as an obstacle to growth of table funding.

As per Real Estate Settlement Procedures Act disclosure regulations borrowers are to be informed about such payments to broker made as servicing released premiums which brokers are not in favor of.

Trudeau
Mini Profile  sara

sara
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Post     Post subject: RE: More on table funding..

Table funding is a response to the needs and requirements of the market. By providing the funds for originators at closing, the process helps small firms which do not have the required funds for lending purposes.

What happens in table funding is: mortgage brokers may process and select loans but at the time of settlement, they transfer these loans to the lender. Most mortgage brokers take part in table funding in order to avoid disclosing lender rebates to borrowers.
Alex


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Table funding is a popular practice in the mortgage industry. It involves putting the loan in the broker's name but the funds are provided by a lender to whom the loan is assigned after closing. This means, on paper the loan is considered to have been originated by a broker but the actual funds are offered by the lender or a loan company.

However, the Department of Corporations and Department of Real Estate in California have declared the practice as illegal under the laws in the Financial Code and the Business and Professions Code.
jacquell


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Post     Post subject: "Wet" Funding

What is Wet Funding mean? state like Virginia, West Virgina, NC, Main, What happenes if you didn't sent the funds on time?
Mini Profile  sara

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Post     Post subject: wet funding

Hi jacquell,

Wet funding implies that as borrower signing for a mortgage deal will get the loan funds right at the closing time when he signs on the loan docs. Usually the borrower gets the funds within 3-4 days of the closing. This goes the same for purchase as well as refinance.

Take Care

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Mark


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Alex mentioned above that "the Department of Corporations and Department of Real Estate in California have declared the practice as illegal under the laws in the Financial Code and the Business and Professions Code." I believe that is correct, but relates only to residential mortgage loans. I believe table funding by licensed real estate brokers in California is permitted for commercial properties, or for multi-unit residential properties comprised of five or more units. If that understanding is incorrect, I'd like to know...
Mini Profile  Caron

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Post     Post subject:

Hi Mark,

You're correct. Table funding in California is legal for commercial properties.

good luck

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Jacquell


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Post     Post subject: Wet states funds

I am work in Reverse Mortgage loan, How would you explain "wet States Funds" to staff of peoples. What happenes if borrower didn't sign doc correction? What happenes if disaster notices can't funds loan on time?
Mini Profile  sara

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Post     Post subject:

A similar query has been discussed at http://www.mortgagefit.com/know-how/wetstates-funds.html . Please have a look at it.
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Nash


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Post     Post subject: Table funding

Is table funding legal in Pennsylvania. What allows a broker to stand as grantor of loan when he/they dont have cash on hand to support claim.
Its like placing a bet and not being able to cover if you lose !!!
Jasmine


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Post     Post subject:

Table funding is available in case of wet funding states. I don't think Pennsylvania is a wet funding state. Thus, I don't think this option is available in case of Pennsylvania.
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