Certified Mortgage Banker (CMB) Exam

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A mortgage bank's secondary marketing department has a large pipeline of locked loans funded by a warehouse line of credit. The warehouse lender, concerned about market stability, unexpectedly increases the 'haircut' from 2% to 5% for all loan types. What is the most immediate and critical consequence for the bank?

A significant increase in the bank's immediate liquidity requirement. A decrease in the credit quality of the loan pipeline. An automatic increase in the interest rate offered to borrowers on locked loans. A violation of the TRID rule for all loans in the pipeline.

Correct Answer:

A significant increase in the bank's immediate liquidity requirement.

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