Warehouse Bank Strategy: A Critical Decision for 2026
- Jewell Salazar
- Jan 12
- 3 min read
As the mortgage market approaches its next inflection point, warehouse bank relationships warrant renewed scrutiny. Too often, these partnerships are evaluated narrowly—almost exclusively through the lens of pricing. While line costs are undeniably important, an approach that prioritizes rate spreads alone can expose lenders to material operational and liquidity risk as market conditions evolve.
A well-constructed warehouse strategy begins with diversification and strategic alignment. Stability remains paramount, and a strong relationship with a transparent and reliable warehouse bank representative is foundational. Mortgage companies should prioritize partners capable of supporting their core product mix, including specialized or higher-risk offerings that may not be universally accepted. Equally critical is scalability: the ability of warehouse providers to expand capacity during periods of growth, rather than retrench amid volatility.
History has demonstrated that warehouse lenders can—and do—exit the market or materially reduce exposure during times of stress. Overconcentration with a single provider, or insufficient evaluation of counterparty strength, can leave lenders vulnerable to funding disruptions precisely when market opportunities emerge.
Operational considerations also merit attention. Engagement with your internal accounting teams can reveal meaningful differences in warehouse lenders’ interface and disbursement systems. Variability in funding efficiency alone can materially impact costs and cycle times.
Mortgage lenders that proactively reassess and refine their warehouse relationships today will be better positioned to grow, adapt, and remain resilient regardless of market direction. Selecting the right warehouse partners is not merely about funding loans; it is about preserving long-term stability, liquidity, and strategic optionality in an uncertain environment.
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Hedging & Pipeline Risk Management - Dr. Schell can help explain how hedging functions, the benefits of hedging, and the risks associated with the activity. See blog posts.
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About Dr. Schell:
Dr. Andy Schell, Ph.D., DBA, MSML, MBA, CPA/CFF, CMB
Dr. Schell is CEO, Managing Partner, and Co-Founder of Mortgage Banking Solutions and the Founder of MBS Financial Services ("MBS"), based in Austin, Texas. Dr. Schell is known for his ability to turn "vision into reality" and "chaos into order" as he finds creative solutions to the challenges his clients face addressing Revenue Stability, Technology Enhancement, Financial Management, and Workflow Efficiency.
He has 4 decades of experience as a strategist directing the activity of both small and large groups of employees including mortgage lending activity at Bank of America. His leadership knowledge extends from his hands-on experience and his academic training in his MBA, his master's degree in leadership, and his doctoral work to examine employee dynamics given leader stimulus
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