Regional lender New York Community Bancorp (NYCB) announced on Monday the completion of a $5.9 billion sale of mortgage warehouse loans to financial giant JPMorgan Chase.
NYCB anticipates closing an additional $200 million in mortgage warehouse loans shortly, pending necessary customer approvals.
This strategic transaction is part of NYCB’s efforts to enhance its liquidity and capital reserves as the bank aims to achieve profitability within the next two years.
Previously, in May, NYCB disclosed its agreement to sell approximately $5 billion in mortgage warehouse loans to JPMorgan Chase.
Mortgage warehouse loans are credit lines extended to lenders, who use these funds to provide mortgages. These loans are repaid when the mortgage lender sells the loans to an investor.
NYCB confirmed that the loans were sold at face value to JPMorgan Chase.
Upon completion, the deal is projected to increase NYCB’s Common Equity Tier 1 (CET1) capital ratio by approximately 70 basis points.
