Which finance option is typically sought by a short-term lending source for mortgage banking companies?

The finance option that is typically sought by short-term lending sources for mortgage banking companies is warehouse lines of credit. This type of credit line allows mortgage lenders to borrow funds to finance their mortgage loans before they can sell those loans in the secondary market.

Warehouse lines of credit are essential for mortgage banking because they provide liquidity, enabling these companies to fund mortgage loans for borrowers without waiting for the reimbursement from the sale of these loans. Once the loans are sold, the mortgage banking company can pay back the warehouse lender and replenish their credit line for additional lending.

In contrast, savings accounts do not provide the necessary short-term funding structure that mortgage banking companies require. Home equity loans are used by homeowners to borrow against the equity in their property rather than serving as a financing tool for mortgage companies. Credit unions primarily function as member-owned financial institutions offering savings and loan services to their members, rather than catering specifically to the short-term funding needs of mortgage banking operations.