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

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what is table funding?

blue · Posted: Wed Mar 28, 2007 2:53 pm 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

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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.

helping_user · Posted: Wed Mar 28, 2007 10:58 pm Post subject:

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

Caron · Posted: Fri Mar 30, 2007 5:19 am 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.

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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

sara · Posted: Wed Apr 04, 2007 3:27 am 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.

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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.

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

sara · Posted: Wed Aug 20, 2008 5:23 am 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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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...

Caron · Posted: Fri Sep 05, 2008 6:07 am Post subject:

Hi Mark,

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

good luck

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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?

sara · Posted: Fri Sep 12, 2008 6:26 am 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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