Warehouse Lines of Credit |
9 Months Ended |
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Sep. 30, 2023 | |
| Warehouse Lines Of Credit | |
| Warehouse Lines of Credit | Warehouse Lines of Credit Encompass Lending Group (“Encompass”), a wholly owned subsidiary of the Company, utilizes line of credit facilities as a means of temporarily financing mortgage loans pending their sale. The underlying warehouse lines of credit agreements, as described below, contain financial and other debt covenants.
Encompass maintains a master loan warehouse agreement with a bank whereby Encompass borrows funds to finance the origination or purchase of eligible loans. Interest on funds borrowed is equal to the greater of 5.00% or the 30-Day Secured Overnight Financing Rate (SOFR) plus 2.625%. The agreement expires in July 2024. The maximum funding available under these loans at September 30, 2023 was $7.5 million and December 31, 2022 was $15.0 million. At September 30, 2023 and December 31, 2022, the outstanding balance on this warehouse line was approximately $4.5 million and $1.7 million, respectively. As of September 30, 2023, Encompass was in compliance with the debt covenants under this facility.
Encompass maintains a mortgage participation purchase agreement with a bank whereby Encompass borrows funds to finance the origination or purchase of eligible loans. Interest on funds borrowed is equal to the greater of 3.61% or the 1-month Term SOFR plus 2.11%. The agreement expires in December 2023.The maximum funding available under these loans at September 30, 2023 was $7.5 million and December 31, 2022 was $25.0 million. At September 30, 2023 and December 31, 2022, the outstanding balance on this warehouse line was approximately $2.4 million and $0.8 million, respectively. As of September 30, 2023, Encompass was not in compliance with certain of these debt covenants under this facility related to earnings, but it has received a waiver.
Encompass also had a warehousing credit and security agreement with a bank whereby Encompass borrowed funds to finance the origination of eligible mortgage loans. The agreement expired in September 2023 for the facility in the amount of $7.5 million and there was no outstanding balance as of September 30, 2023. Encompass was in compliance at the time of expiration of the agreement. Encompass maintains a warehousing credit and security agreement with a bank whereby Encompass borrows funds to finance the origination of eligible mortgage loans. Interest on funds borrowed is equal to the greater of 5.75% or the 1-month CME Term SOFR plus 2.00%. The agreement expires in August 2024. The maximum funding available under these loans at September 30, 2023 was $10 million. At September 30, 2023, there was no outstanding balance on this warehouse line. As of September 30, 2023, Encompass was in compliance with debt covenants under this facility.
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