Presidents Day Holiday Lock Desk Hours

Overview

The Carrington Mortgage Services, LLC (CMS) Lock Desk will be closed on Monday, February 18, 2019 for Presidents Day, which is a Federal Holiday. Normal lock hours will resume on Tuesday, February 19, 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, February 18, 2019 cannot be included in the rescission period for refinance transactions.
  • Monday February 18, 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, February 18, 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, February 18, 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 VA Rule for Cash-Out Refinances

Overview

On December 17th, 2018, the Veteran’s Administration (VA) published an Interim Final Rule addressing VA guaranty requirements for cash-out refinance loans. The rule will be effective for loan applications taken on or after February 15th, 2019 and applies to all Full Doc refinance loan transactions (even if the existing loan is NOT a VA loan). The rule does not apply to VA IRRRL loans.

This rule change is intended to ensure Veteran borrowers continue to have access to responsible credit options for refinancing. In addition, the rule provides Veteran borrowers with sufficient information regarding the impact of a refinance loan on their current and future financial position. Highlights of the new rule include:

  • New Comparison Disclosure form
  • New Total Loan to Value (TLTV) calculation limited to 100% TLTV
  • Expanded Net Tangible Benefit options
  • Recoupment Certification only required on VA to VA Rate/Term refinances

Note: Loan Seasoning requirements are not changed.

Comparison Disclosure

The Comparison Disclosure within three (3) days of loan application and at closing. The Veteran borrower is required to sign and acknowledge receipt of the form.

The disclosure shows the refinancing loan passes NTB and provides a comparison of key loan characteristics for the existing and refinancing loan, including:

  • Current Balance (UPB) vs. New Loan Amount
  • Amortization type (Fixed/ARM) for Prior and New Loan
  • Interest rate (Prior/New)
  • Loan term (Remaining vs. New Term)
  • Total amount the Veteran will have paid after making all payments as scheduled (Prior/New)
  • LTV (Based on UPB versus Note Amount)
  • Home equity being removed from property

To comply with the three (3) day disclosure requirement:

Broker Disclosed loans: Brokers are required to meet the requirements and provide the Comparison Disclosure dated within three (3) days of application. CMS will ensure compliance at Submission Acceptance or reject the loan submission.

CMS Disclosed loans: CMS will complete NTB form. If any required data elements are missing, CMS will condition the broker and cannot accept the submission until the missing items are received.

Total Loan-to-Value (TLTV)

Under the rule, the LTV is now calculated based on the total loan amount and not the base loan amount, resulting in a higher TLTV when there is a funding fee. VA will no longer guaranty refinancing loans when the TLTV exceeds 100 percent; therefore, it may be necessary to reduce the loan amount to qualify or if the Veteran borrower chooses to close a loan in which the loan amount exceeds 100 percent of the reasonable value of the property, they must pay the amount which exceeds 100 percent of the property value at loan closing.

New TLTV Calculation: Divide the total loan amount (including VA funding fee, if applicable) by the reasonable value on the Notice-of-Value (NOV) of the property determined by the appraiser.
Net Tangible Benefit (NTB) Requirements

All cash-out refinance loans must pass NTB. The refinancing loan must satisfy at least one of the following:

  • Eliminate monthly mortgage insurance
  • Decrease the loan term
  • Decrease monthly (P&I) payments (changes from PITI to PI Only)
  • Reduce the interest rate
  • Maintain TLTV equal to or less than 90%
  • Refinance an interim construction loan
  • Increase monthly residual income
  • Refinance from an adjustable-rate loan to a fixed-rate loan

Fee Recoupment

Recoupment is only required on VA to VA Rate/Term refinance transactions.

Recoupment Calculation – Divide all fees, closing costs, expenses, and incurred costs (excluding taxes, escrow, insurance, and like assessments), by the reduction of the monthly principal and interest payment as a result of the refinance. If the loan being refinanced has been modified, the principal and interest reduction must be computed / compared to the modified principal and interest monthly payment.

Loan Seasoning

The rule does not affect existing loan seasoning requirements and all VA-guaranteed cash-out refinance loans must be seasoned for a period of time. The required seasoning is the later of:

  • The date that is 210 days after the date on which the first payment is made on the loan, and;
  • The date on which the sixth monthly payment is made on the loan

February Special – No Underwriting Fee + Same Day Turnaround

Special February Promotion

We have a sweetheart of a deal for you!

Carrington Mortgage Services, Wholesale Lending Division is offering to waive the underwriting fee on ALL Non-QM* submissions in the month of February. Whether you submit 1 or 100 loans, the underwriting fee ($650 in most states) will be waived.

In by 10 and out by 5**

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 5 p.m. How’s that for fast?
February is a short month, but with lower costs and faster service, the Carrington Team is committed to making February very successful for all.

Become an Approved Broker

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*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 Westfield office should be completed by 10am Eastern Time; submissions to our Anaheim office should be completed by 10am Pacific Time.

***Please see the Carrington Advantage Products Loan Submission Form.

Inflation is not a threat

Last Week in Review: No rate hikes in 2019. Who wins?

Stocks continued to react positively to Fed Chair Powell’s Jan 4th speech, where he essentially said, “we have your back”…meaning that the Fed will be flexible and may not raise rates at all in 2019. 

There is an old saying in the financial markets – “don’t fight the Fed.” This means that if the Fed is saying or doing something (hinting no rate hikes) that helps Stocks, that theme will continue until the story changes. 

Typically, when stocks move higher, so do long-term rates, like home loans. And this past week, we saw the recent nice trend of lower rates get disrupted. 

Even though the recent trend of lower rates, the lowest since the Spring, is very much at risk – we should not expect long-term rates to move too high. Why? Inflation is not a threat. 

Fed President Bullard, also said he expects inflation to be near current levels for the next FIVE years. If that is the case, home loan rates will remain relatively attractive for longer than most expect. 

Apple helps home loan rates

Last Week in Review:
Apple, Congress negate solid jobs numbers

I-Phone maker, Apple, was a downer this week as the company announced a surprise weak sales and earnings forecast for the first quarter of 2019. 

Stocks and interest rates fell on the bad news, concerned that Apple, the first big tech firm to report weak growth in 2019, is the canary in the coalmine and that more companies will report weaker sales and earnings. 

Regardless of Apple’s current woes, the U.S. economy is still humming along as was evident in Friday’s Jobs Report which showed an eye-popping 312,000 jobs created in December. 

Adding to the good news in the Jobs Report was a 3.2% hike in wage gains year over year – the highest level in a decade. 

Remember, jobs buy houses, not rates, so the positive jobs numbers and wage growth are great for housing. 

But while we are on the subject of rates, the bad Apple news helped rates improve again this week to the lowest levels in nearly a year. 

Rates have been steadily improving since early November. What happened in early November? Congress became divided. Bonds and home loan rates love uncertainty, chaos, stalemates and bad news – Congress can provide plenty of it from time to time. 

Stocks Rally

Last Week in Review:
Headline Risk Highlights Christmas Week.

The financial markets had plenty to cheer about this week. On Wednesday, Stocks rallied a stunning 1,000+ points, enjoying their best one-day gain in history and then rallied over 800 points higher intraday on Thursday, erasing a huge midday loss. All in all, a great and welcome week in what was otherwise a miserable December for Stocks. 

Typically, higher stock prices mean higher home loan rates but that wasn’t the case this holiday week. Yes, Bonds moved slightly lower and home loan rates slightly higher in response to the swift Stock rally, but rates ended the week and head into 2019 near the best levels since spring. 

The high volatility in the markets is likely to continue well into 2019 as Stocks and Bonds continue to bounce around in response to the U.S. government shutdown, U.S./China tariffs, China slowdown, European issues and uncertainty around the Fed. 

Is this good news for home loan rates and housing? Inflation is in line with the Fed’s expectations and bond yields in other parts of the world remain low due to slower economic growth which means that home loan rates should remain relatively low for the foreseeable future.

Best home loan rates since April

Last Week in Review:
Spring rates revisited.

It was all about the Fed this past week. On Wednesday, they hiked the Fed Funds Rate by 25 basis points (0.25 percent). That rate affects short-term loans like auto and credit cards – what it doesn’t affect are home loan rates. 

Home loan rates actually improved to the best levels since April. Why? 

The Fed Statement suggested that inflation is moderating and remains beneath the Fed’s target of 2 percent year over year.

If Inflation remains low, long term rates – like mortgages, will also remain relatively low. 

Also helping home loan rates improve was a big sell-off in Stocks. The Stock market hated the Fed Monetary Policy Statement which suggested more hikes next year, despite acknowledging low inflation and slowing economic conditions around the globe. 

Stocks don’t like Fed rate hikes as they weigh on economic growth due to added costs of financing. 

Bottom line – home loan rates moved nicely lower this past week representing the best time since spring to either purchase or refinance a home.

2018 Holiday Lock Desk Hours

Overview

During the holiday season Carrington Mortgage Services, LLC (CMS) offices, including the Lock Desk, will observe the following schedule:

  • Monday, December 24, 2018 – Closed for the Christmas holiday
  • Tuesday, December 25, 2018 – Closed for the Christmas holiday
  • Tuesday, January 1, 2019 – Closed for New Year’s Day holiday

In addition, due to the New Year’s Day holiday, the Lock Desk will close early Monday, December 31, 2018 at 11:00 AM PST (early market closure of 2:00 PM EST). Normal Lock Desk hours will resume December 26, 2018 and January 2, 2019.

Rate Locks that expire on the holidays will automatically roll to the next business day. In addition, there are some important disclosure considerations associated with the holidays:

  • Tuesday, December 25, 2018 and Tuesday January 1, 2019 cannot be included in the rescission period for refinances.
  • Tuesday, December 25, 2018 and Tuesday January 1, 2019 cannot be included in the seven (7) business day waiting period between the 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, Tuesday, December 25, 2018 and Tuesday January 1, 2019 cannot be included in the three (3) day business 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, Tuesday, December 25, 2018 and Tuesday January 1, 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.

WE MOURN THE PASSING OF AN AMERICAN PRESIDENT

As a Nation, we pause to mourn the passing of George Herbert Walker Bush, the forty-first President of the United States, on November 30, 2018.

His storied life was filled with accomplishment. When he volunteered for duty in the Second World War, George Bush was the youngest aviator in the U.S. Navy. He flew 58 combat missions while defending our country’s freedom. After returning home and completing his education, raising a family, and starting a business, his life of public service resumed. First, as a member of Congress, then as Ambassador to the United Nations, Chief of the United States Liaison Office in China, Director of Central Intelligence, Vice President, and, finally, as President of the United States.

George Bush brought to the White House a devotion to American values and a steadfast determination to guide the United States toward becoming “a kinder, gentler nation.” In his Inaugural Address, he pledged to use American strength as “a force for good.” He was true to his word. With his steady leadership, George Bush guided our country through the successful and peaceful end of the Cold War and into the period of prosperity that followed.

In honor of his life of dedication, Wednesday, December 5, 2018, has been declared a National Day of Mourning throughout the United States. On that day, Carrington offices in the U.S. will be closed for a paid holiday, that we might ponder the remarkable legacy and pay our respects to the memory of President George H.W. Bush. We invite Carrington Associates to join the many millions of people around the world who share our grief in this solemn observance.

Lock Desk Hours for George H. W. Bush National Day of Mourning

 

Overview

The Carrington Mortgage Services (CMS) Lock Desk will be closed in observance of President George H.W. Bush’s death on Wednesday, December 5, 2018 which has been designated as a National Day of Mourning. The financial markets will be closed and no rate sheets will be produced and no rate locks will be allowed. Normal Lock Desk hours will resume Thursday, December 6, 2018.

CMS will be staffed to carry out substantially all of our business functions on Wednesday, December 5, 2018; therefore, it should be treated as a normal business day as follows:

  • Wednesday, December 5, 2018 will be included in the rescission period for refinance transactions.
  • Wednesday, December 5, 2018 will 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, Wednesday, December 5, 2018 will 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, Wednesday, December 5, 2018 will 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.
  • Disclosures mail fulfilled on Wednesday, December 5, 2018 will be considered “sent” on December 6, 2018 due to the Post Office being closed on December 5, 2018. Users must update Sent Date within the Disclosure Tracking Record.

Issues related to locks should be sent via email to lockdesk@carringtonms.com.

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