The Lock Desk will be closed on Monday, May 27, 2019 for Memorial Day, which is a Federal Holiday. Normal lock hours will resume on Tuesday, May 28, 2019.
Additionally, the Lock Desk will close early on Friday, May 24, 2019 at 10:00 A.M. PST due to the early close of the financial markets.
Locks that expire on the holiday will automatically roll to the next business day. In addition there are some important disclosure considerations associated with the holiday:
- Monday, May 27, 2019 cannot be included in the rescission period for refinance transactions.
- Monday, May 27, 2019 cannot be included in the seven (7) business day waiting period between the date the initial Loan Estimate (LE) was provided to the borrower and the consummation of the loan
- When re-disclosure of the LE is required, Monday, May 27, 2019 cannot be included in the four (4) business day waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.
- When re-disclosure of the CD is required, Monday, May 27, 2019 cannot be included in the three (3) business day waiting period between the date the revised CD was provided to the borrower and the consummation of the loan.
Issues related to locks should be sent via email to firstname.lastname@example.org.
Last Week in Review: Americans favor owning
Americans Favor Owning Versus Renting a Home
The Census Bureau recently reported a homeownership rate of 64.2% in the first quarter of 2019, up from the 10-year low of 63.7% in the first quarter of 2015.
A recent study by LendingTree shows that 67% of homeowners surveyed aged 22 and older believe that owning a home is a better option that renting. In addition, the longer you remain in a home, the stronger you believe that owning is better than renting. The survey revealed that 72% of homeowners who have resided in their home for seven to nine years agree with the statement.
The survey also showed that about 15% of homeowners believe renting is easier than owning a home, and another 18% are neutral on the topic. “Just 13% of homeowners across all ages wish they could go back to renting, but when broken down by age, 1 out of every 5 homeowners ages 22 to 37 say they miss renting.”
In conclusion, the US “Goldilocks” economy includes:
- Slowing home price gains
- Rising wages
- Uptick in homes for sale
- Strong job market
- High Consumer Confidence
- Historically low rates
The above points will continue to be a tailwind for new home buyers on their way to the American Dream of owning a home.
Join us to learn why FHA Manual UW is even more important after recent DU TOTAL Scorecard Updates.
During this webinar we will cover:
- What factors in the file can trigger a downgrade to Manual Underwrite
- What Non-Traditional Credit options are available for borrowers without a credit score
- What are Compensating Factors, and how can they help with a higher DTI
- Parameters for working with derogatory credit events
- Submitting the best possible file for fewer conditions the first time through
In an effort to better serve our broker partners, Carrington Mortgage has created a Marketing Resouces center in brokerIQ for approved brokers. The materials available include flyers in PDF format that are customizable with your name, logo, contact information and disclaimers. The flyers can be printed and/or emailed to your prospective borrowers.
Please browse the page to see what flyers are available and contact your Account Executive if you have any questions.
On March 15, 2019, we surveyed our broker community to find out more about their media consumption habits. 116 people responded and these are the results. We think they are very interesting and we hope you do too.
Over the past several years FHA has seen a continued increase in certain higher-risk credit characteristics in mortgages it insures, including an increase in cash out refinances and mortgages with high debt-to-income (DTI) ratios, a decrease in average borrower credit scores and an increasing concentration of credit scores less than 640 combined with DTI ratios greater than 50 percent.
To address mortgages with higher-risk characteristics particularly when multiple risk factors are present, FHA has updated the TOTAL Mortgage Scorecard to manage the decrease in average borrower credit scores and the excessive risk layering that results when multiple risk factors are present.
Effective for all case numbers assigned on and after March 18, 2019, when Carrington Mortgage Services, LLC (CMS) submits a mortgage loan to the TOTAL Mortgage Scorecard via an automated underwriting system (AUS) CMS may receive feedback results indicating the loan file must be manually underwritten. In these cases, CMS must document the final underwriting review decision in accordance with existing FHA requirements for manually underwritten mortgages.
On March 5, 2019, we asked our broker community about how much of their business is Non-QM. We’re curious since there is so much talk in the broker and lending community about Non-QM right now and we wanted to see what you think the future will be. 316 people responded to our survey. Here are the averaged results. We think they are interesting and hope you do too.
Question: What percent of your February 2019 loan volume was Non-QM?
Question: What percent of your total loan volume in all of 2019 do you anticipate will be Non-QM?
According to the respondents of this poll, brokers are expecting their Non-QM business to grow 44% from February through the end of the year! Wow! Are you ready for the change?
Last Week in Review: U.S. Economy showing solid growth.
This past week, the Bureau of Economic Analysis (BEA) reported the U.S. economy, as defined by Gross Domestic Product (GDP), grew at a 2.6% rate in the fourth quarter of 2018. Economists and the markets were expecting 2.0% to 2.3%, so this was a nice upside surprise.
This left GDP for all of 2018 at 2.9%. Consumer spending, which makes up nearly two thirds of GDP, expanded by a solid 2.8% in the fourth quarter – yet slower than the previous quarter.
Another solid number within the report was business investment which grew at a swift 6.2% pace.
This Q4 GDP reading was the first of three – so we will see some revisions in the months ahead.
Seeing the economy grow at such a nice clip despite high stock market volatility and the U.S. government shutdown is a good sign as we head into the spring housing market.
The increased wealth effect caused by the recent rally in Stocks along with one-year lows on home loan rates, rising wages and increased housing inventory sets the stage for an improved 2019 housing market.
Back by Popular Demand!
Carrington Mortgage Services, Wholesale Lending Division is offering to waive the underwriting fee on ALL Non-QM* submissions in the month of March. Whether you submit 1 or 100 loans, the underwriting fee ($650 in most states) will be waived!
Bonus: The Slamdunk Offer!
In by 10 and out Same Day**
For any full submission*** received in underwriting by 10 a.m., we will commit to have a same day turnaround and have a response to you by the end of the day. How’s that for fast?
With lower costs and faster service, the Carrington Team is committed to making March very successful for all.
Already an approved broker?
*Carrington Flexible Advantage (Non-QM) product requirements vary depending on the consumer’s credit grade, LTV, DTI, and FICO scores and may require reserves from 3 to 6 months. Ask your Account Executive for additional details and requirements. Not available in MA and ND. No cash out in TX.
**Submissions to our Windsor office by 10 a.m. Eastern Time will be completed by end of day (EDT); submissions to our Anaheim office by 10 a.m. Pacific time will be completed by end of day (PDT).
***Please see the Carrington Advantage Products Loan Submission Form.
Last Week in Review: Canary in the coalmine.
The financial markets are sensing a government shutdown and protracted trade war with China will be averted. This is good news and a reason why Stocks have continued to push higher and home loan rates have capped for the past few weeks.
But last Thursday, Retail Sales was reported at a shocking 9-year low. Combing through the report, a 3.9% decline in internet purchases was a huge negative surprise. With consumer spending making up nearly 70% of GDP, there is fear in the markets that this very poor Retail Sales number is an early warning sign that both consumer spending and thus economic growth are indeed slowing.
One thing we know for sure — Bonds love uncertainty and bad news. This Retail Sales report brought both and, as a result, pushed prices and home loan rates near the best levels in a year.
We will be watching future Retail Sales reports to see if this is just one bad report or the start of a negative trend.
In any case, reports like these support the Fed to not raise rates in 2019.