New Century had massive lines of credit called warehouse funding facilities that were either provided by Credit Suisse (pronounced Cray-dee Sueeze) or guaranteed by the same. The credit lines were used to originate mortgages
The originators debt was converted into a cash equivalent or treated as a cash sale upon the extinguished liabilities, by placing the consideration into the originators bank, classified as depositor’s assets.
The deposits grew at the full value of the debt owed as a future value and not a present net value. These bank lines used to originate loans were converted into an future redemption date sold as an asset versus a liability