What is the term used for short-term lending to mortgage banking companies that allows them to originate and hold mortgage loans?

The term used for short-term lending to mortgage banking companies that allows them to originate and hold mortgage loans is known as warehouse financing. This financial arrangement enables mortgage lenders to obtain the necessary funds to close loans before they can sell them in the secondary mortgage market or to investors.

Warehouse financing essentially functions as a line of credit that provides liquidity to mortgage lenders, allowing them to continue their operations without needing to have all the capital available upfront. Once the loans are sold, the proceeds are typically used to pay off the warehouse loan, making this a crucial component of the mortgage banking process.

In contrast, bridge loans are often used to provide temporary financing for real estate purchases, consuming lending refers to loans to individuals for personal use, and home equity lines involve borrowing against the equity in a borrower's existing home. None of these options pertain to the specific short-term lending practices that characterize warehouse financing for mortgage banking companies.