2019 Thanksgiving Holiday Lock Desk Hours

Overview

The Carrington Mortgage Services, LLC (CMS) Lock Desk, will be closed Thursday, November 28, 2019 in observance of Thanksgiving, which is a federal holiday.  Due to the holiday, the Lock Desk will be closing early on Friday, November 29, 2019 at 11:00 AM PST (early market closure of 2:00 PM EST).  Normal Lock Desk hours will resume on Monday, December 2, 2019.

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:

  • Thursday, November 28, 2019 cannot be included in the rescission period for refinance transactions.
  • Thursday, November 28, 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, Thursday, November 28, 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, Thursday, November 28, 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 lockdesk@carringtonms.com.

New Carrington Flexible Advantage Plus 85% Expanded Cash-Out LTV Enhancement

Overview

Effective November 14, 2019, Carrington Mortgage Services, LLC (CMS) is pleased to introduce a new 85% Expanded Cash-Out LTV option for the Carrington Flexible Advantage Plus program.

The 85% Expanded Cash-Out LTV option is perfect for borrowers looking to pull out cash, consolidate debt, pay for college tuition, home improvements, etc.  We are excited to offer a product that allows creditworthy borrowers the ability to access higher loan to values with a 620 minimum FICO; especially when many other lenders have recently pulled back to 80% LTV.

Eligibility Requirements for LTVs 80.01-85% and FICOs 620-679

  • Applies to Carrington Flexible Advantage Plus only
  • Full Documentation
  • Detached Single Family Residence and Detached PUD Only (No Condos)
  • Maximum 45% DTI
  • Minimum Loan Amount = $100,000
  • Maximum Loan Amount = $600,000
  • Maximum Cash-in-Hand to borrower = $50,000

Note: All payoffs, which are excluded from the Cash-in-Hand limit must be reflected on the Closing Disclosure and paid off through closing.  Payoffs include, but are not limited to, IRS debt, tax liens, business debt, or paying off a spouse or partner to come off title.

  • Residual Income = $3000 plus $150 per dependent

Contact your Account Executive for details.

Resources

Refer to the Carrington Flexible Advantage Plus Program Matrix for additional information.

Uploading Conditions Just Got Faster & Easier

See how uploading conditions has changed

Lock Extension Automation

Overview

Carrington Mortgage Services, LLC (CMS) is pleased to announce the Lock Desk has re-enabled the Auto-lock functionality. Effective immediately on Wholesale files, all rate lock extensions no longer require a written email request to be sent to the Lock Desk.  Broker Loan Officers now have the ability to submit Lock Extension requests directly in BrokerIQ.  This enhancement automatically approves the extension request with any pricing change for the extension fee. All existing Wholesale Rate Lock policies still apply.

Please note: Already processed manual lock extensions can only be processed through the Lock Desk. To extend a lock that has already been manually extended brokers should email the lock desk at lockdesk@carringtonms.com.

Resources

Refer to the Auto Lock Extension Guide on the BrokerIQ Training Center page for step by step instruction for Broker Loan Officers regarding how to process Auto Lock Extension requests through BrokerIQ.

Refer to the Wholesale Rate Lock Policy for detailed information on pricing and rate locks.

Veteran’s Day Holiday Lock Desk Hours

Overview

Carrington Mortgage Services (CMS) offices, including the Lock Desk, will be closed Monday, November 11, 2019 in observance of Veteran’s Day, which is a Federal Holiday. Normal Lock Desk hours will resume on Tuesday, November 12, 2019.

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, November 11, 2019 cannot be included in the rescission period for refinance transactions.
  • Monday, November 11, 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, November 11, 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 Closing Disclosure (CD) is required, Monday, November 11, 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 lockdesk@carringtonms.com.

Disclosing loans just got easier with Carrington

In an effort to make disclosing loans easier and faster, Carrington Mortgage Services, LLC will begin providing State Specific Disclosures as part of the lender disclosure package for all loans disclosed on or after November 1, 2019.

Disclosure packages will be available in brokerIQ where you can download the disclosures to meet signature requirements. It is not required to have the Broker and borrower sign the same form.

At this time this process update excludes: Advance Fee Agreements, Mortgage Broker Agreements, Dual Capacity Disclosures, and the Anti-Steering Disclosure. These disclosures will need to be supported as required.

To facilitate this change, we have created a resource which outlines the required disclosures for each state, and what is supported with the new process.

 

SEE STATES HERE

Labor Day Holiday Lock Desk Hours

The Carrington Mortgage Services, LLC – Wholesale Lending Division Lock Desk will be closed on Monday, September 2, 2019 for Labor Day, which is a Federal Holiday. Normal lock hours will resume on Tuesday, September 3, 2019.

Additionally, the Lock Desk will close early on Friday, August 30, 2019 at 11:00 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, September 2, 2019 cannot be included in the rescission period for refinance transactions.
  • Monday, September 2, 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, September 2, 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, September 2, 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 lockdesk@carringtonms.com.

Thank you.

Risk of Recession has risen

Last Week in Review: Yield Curve Inversion Discussion

This past week we watched Bond yields/interest rates decline around the globe on rising fears of a global recession.

It’s worth noting that home loan rates did not partake in the declining interest rate party this week as the Treasury market, not the Mortgage Backed Security market, received the majority of investment dollars.

A recession is defined as two consecutive quarters of negative growth, so when Germany reported its economy shrank or contracted, financial markets were spooked and investors fled into the safe haven of the U.S. dollar and U.S. denominated assets like Treasuries.

The flood of capital into the U.S. caused our 10-year Note yield to drop sharply and beneath that of the 2-year Note yield, causing a yield curve inversion for the first time since 2007… right before the global financial crisis.

History has shown that each time the 10-year yield moved beneath the 2-year yield in the last 50 years, a U.S. recession followed sometime in the next 22 months.

So, is the U.S. headed for a recession? Maybe, and the chances increase everyday as the U.S. economy is in the midst of the longest economic expansion (without a recession) in our nation’s history.

Could the yield curve inversion be a false signal this time around? Also, a maybe.

With term premium or the added yield investors demand to park their money in long-term Bonds declining for over 30 years, it’s more likely to see yield curve inversions today. And with global yields collectively at 120-year lows and negative around much of the globe, money is literally pouring into our Treasury market as our anemic 1.59% 10-year yield is relatively attractive.

The chance of a recession in 2020 has climbed to about 30%. It will be interesting to see what happens with a couple of Fed rate cuts before 2019 ends.

A U.S./China trade deal, while not likely soon, would go a long way to help lift uncertainties and help many global economies possibly avoid recession.

Bottom line: the risk of recession has risen, but we are not seeing a recession in the cards at the moment. Being the cleanest shirt in the laundry, the U.S. is attracting investment dollars in droves and helping cause an inversion. Home loan rates have not declined further as the gains in the Bond market have been limited to the Treasury market. So if you are in the market to either buy a home or refinance, today is a great day to do so.

New Interest Only ARM Program Option

Overview

Carrington Mortgage Services, LLC (CMS) is pleased to announce effective Monday, July 15, 2019, the Carrington Advantage (Flexible Advantage/Advantage Plus and Investor Advantage) programs will offer a new Interest-only product option. Interest-Only loans offer borrowers lower monthly payments by allowing borrowers to pay only the interest during the 10 year interest-only period.  Once the interest-only period ends, borrowers must begin making principal payments to pay off the debt.

The new Interest-only product has the following features:

  • Terms Available: 5/1 ARM-IO, 7/1 ARM-IO, and 10/1 ARM-IO
  • Doc Types: Full Doc, 1-Year Alt Doc, 12 or 24 Month Bank Statements
  • 5/1 Caps = 2/2/5 (Initial cap at 2%; Interim cap at 2%; Life cap at 5%)
  • 7/1 and 10/1 Caps = 5/2/5 (Initial cap at 5%; Interim cap at 2%; Life cap at 5%)
  • Margin = 3.50% (Flexible Advantage Plus), 5.00% (Flexible Advantage)
    and 6.00% (Investor Advantage)
  • Floor = Start Rate
  • Index = 1 Year LIBOR

Interest-only Qualifying Payment

Interest-only loans qualify using the fully amortized payment calculated over the fully amortizing period, based on the greater of the note rate or the fully indexed rate to determine qualifying PITIA. For example, a 30-year loan with a 10-year interest-only period would have a 20-year fully amortizing period (see guidelines for details).

Example 1:

  • Loan Amount: $400,000
  • Interest Rate: 5.75%, Full Indexed Rate 6.75%
  • 5/1 IO ARM
  • Principal and Interest to Qualify borrower = $3,041.46 (Fully Indexed Rate over 20 Year Amortization)

Example 2:

  • Loan Amount: $250,000
  • Interest Rate: 7.25%, Fully Indexed Rate 6.75%
  • 7/1 IO ARM
  • Principal and Interest to Qualify borrower = $1,975.94 (Interest Rate over 20 Year Amortization)

View the Guidelines here.

Please Note: All Interest-only Terms are amortized over 20 years for qualification and have an Interest-only period of 10 years regardless of the fixed period of the ARM.

Calm before G20 storm

This past week financial markets around the globe traded in a bit of a calm sideways pattern ahead of arguably the most important economic event of 2019 — the US/China trade talks at the G20 meeting.

Depending on when you read this newsletter, the headlines may already be out as talks between President Trump and China’s President Xi are to take place on Saturday, June 29th.

How the trade talks go could have a major impact on global economies and even determine whether the Fed cuts rates, which at the moment is widely expected to happen in late July.

So, if you are looking to buy a home or potentially refinance an existing one, it’s hard to overstate the magnitude this event can have on rates for the foreseeable future.

At the moment we are watching the 10-Year Note yield hover near 2.00%, which has served as a psychological barrier preventing rates from moving lower. How the US/China talks go could very well determine which side of 2.00% the 10-Year Note trades.

Why is this important? Because if the 10-Year Note yield moves lower and beneath 2.00%, it will push Mortgage Bond prices higher and home loan rates lower still. The opposite is also true.

Bottom line: home loan rates are within .50% of the best rates ever and there is a very real chance we might see even lower rates in the very near future … like next week.

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