Warehouse Lines of Credit |
12 Months Ended |
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Dec. 31, 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 December 31, 2023 and December 31, 2022 was $7.5 million and $15.0 million, respectively. At December 31, 2023 and 2022, the outstanding balance on this warehouse line was approximately $3.5 million and $1.7 million, respectively. As of December 31, 2023, Encompass was in compliance with the debt covenants under this facility.
Encompass discontinued use of a mortgage participation purchase agreement with a bank whereby Encompass borrows funds to finance the origination or purchase of eligible loans. The agreement was discontinued on December 31, 2023 for the facility in the amount of $7.5 million and there was no outstanding balance as of December 31, 2023. Encompass was in compliance at the time of discontinuation of the agreement. At December 31, 2022, the outstanding balance on this warehouse line was approximately $0.8 million.
Encompass 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 December 31, 2023 was $10 million. At December 31, 2023, there was $4.8 million outstanding balance on this warehouse line. As of December 31, 2023, Encompass was in compliance with debt covenants under this facility.
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