Effective Thursday, August 9, 2018, Carrington Mortgage Services, LLC (CMS) will introduce the Investor Advantage Program. The Investor Advantage Program is well suited for Investors with some credit challenges and is convenient without the need for income documentation and traditional debt ratios to qualify. The borrower only needs to have positive cash flow for the subject property expressed as a Debt Coverage Ratio greater than 1.00.
Debt Coverage Ratio (DCR) is the expected Monthly Rents divided by the Total Monthly Payment. For example, if the expected gross rental amount for the property is $2000, then the total loan payment cannot exceed $2000. Other highlights are listed below.
- Recent Mortgage/Rental Lates up to 1x30x12
- Foreclosure, Short Sale, Deed in Lieu and Bankruptcy with 24 months seasoning
- Non-warrantable Condos and 2-4 Units Permitted (max 75% LTV)
- First Time Investors and Unleased Property (Refi Only) Permitted (max 70% LTV)
- No Reserves required
- No Income Documentation required
- No Mortgage Insurance required
Investor Advantage Program Terms
- Purchase, Rate/Term and Cash-Out Transactions (up to $750,000 cash-out)
- 5/1 and 10/1 LIBOR ARMs
- Maximum Loan Amount to $2.0MM
- Investment Properties Only
- Max LTV/CLTV with Debt Coverage Ratio ≥ 1.15: Up to 80%
- Max LTV/CLTV with Debt Coverage Ratio 1.00 – 1.14: Up to 75%
- Min FICO: 620
Last Week in Review:
Home sales slumped in June while second quarter economic growth soared.
Existing Home Sales declined for the third straight month in June, falling 0.6 percent from May to an annual rate of 5.38 million units, the National Association of REALTORS® reported. Declines in the West and South outpaced gains in the Northeast and Midwest. From June 2017 to June 2018, sales fell 2.2 percent. Inventory of homes for sale on the market was at a 4.3-month supply, well below the 6-month supply seen as normal.
Lawrence Yun, NAR chief economist, says, “The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market. What is for sale in most areas is going under contract very fast and in many cases, has multiple offers.”
Sales of new homes also fell 5.3 percent from May to June to an annual rate of 631,000, below the 670,000 expected. This was their lowest level since October 2017. However, sales were up 2.4 percent from June of last year. New Home Sales surged in the Northeast, but declined in the West, Midwest and South. The ongoing hurdles of rising lumber costs and shortages of labor and land were partly to blame.
Economic growth surged in the second quarter of 2018 due in part to a big rise in consumer spending. The Bureau of Economic Analysis reported that Gross Domestic Product (GDP) rose 4.1 percent from the 2.2 percent recorded in the first quarter. The report also showed that consumer spending jumped 4 percent in the second quarter from the dismal 0.5 percent in the first quarter. GDP is the monetary value of all finished goods and services produced within a country’s borders in a specific time period. It is considered the broadest measure of economic activity.
Mortgage Bonds were weighed down by the strong GDP report as well as the positive news that trade concessions with the EU were announced. Home loan rates remain near historic lows.
Last Week in Review:
June saw Housing Starts slump and Retail Sales jump.
U.S. homebuilders broke ground on fewer homes than expected in June, due in part to higher costs for lumber, lack of available land and a shortage of construction workers. June Housing Starts fell 12.3 percent from May to an annual rate of 1.173 million units. This was the lowest level since September 2017, as Housing Starts declined in all four major regions of the country. Starts were down 4.2 percent from June of last year.
Single-family starts, which make up the bulk of residential housing, fell 9.1 percent in June from May. Multi-family dwellings of five or more units plunged 20.2 percent month over month. Building Permits, a sign of future construction, also declined 2.2 percent from May to an annual rate of 1.273 million. June’s figures were a disappointment given that a lack of inventory has been an ongoing challenge to homebuyers in many areas of the country.
Retail Sales went in the opposite direction in June, as they were up 0.5 percent from May, the Commerce Department reported. May’s figure was also revised sharply higher to 1.3 percent from 0.8 percent. From June 2017 to June 2018, sales rose 6.6 percent.
The Retail Sales report is considered the most-timely indicator of broad consumer spending patterns. The key takeaway is that people spend more when they are less concerned about the economy and their employment. Strong Retail Sales typically signal a belief that the economy is doing well.
Mortgage Bonds continued to trade in a sideways pattern in recent days due in part to the mix of economic data. Home loan rates remain near historic lows.
25 bps to 100 bps Pricing Improvement
Effective immediately, Carrington Mortgage Services, LLC – Wholesale Lending Division has improved pricing on our Flexible Advantage programs (non-prime/near prime) :
- Full Doc Loans
- 12 Month Bank Statement Advantage
- 24 Month Bank Statement Advantage
- Max Loan Amount increased to $2 Million
- Maximum Cash out Increased to $750,000
Contact your Account Executive for more information, and make sure to check out our rates.
Become an Approved Carrington Broker Today! Apply now.
The Carrington Mortgage Services, LLC (CMS) Lock Desk will be closed on Wednesday, July 4, 2018, for Independence Day, which is a Federal Holiday. In addition, the lock desk will close early (10:00 AM PST) on Tuesday, July 3, 2018. Normal lock hours will resume on Thursday, July 5, 2018.
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:
- Wednesday, July 4, 2018, cannot be included in the rescission period for refinance transactions.
- Wednesday, July 4, 2018, 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, Wednesday, July 4, 2018, 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, Wednesday, July 4, 2018, 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 email@example.com.
Coming to Sacramento July 12th!
Elevate your performance as a Loan Originator in the Sacramento area with the information and tools provided by attending this free event. Gain new insights into your local market and national trends. Get ahead of your competition by leveraging this information to elevate your performance and better serve customers in your area.
You Can’t Afford to Miss This Event
Exclusive for Loan Originators and Mortgage Brokers hosted by Carrington Mortgage Services, LLC a leader in the serving the underserved market and known for being the Go-to-Lender for Tough Loans.
- 8 am – 9 am Complimentary Breakfast and Networking Opportunity
- 9 am – 9:45 am Local and National Real Estate and Housing Market Update
Find out what’s happening in the US economy and the housing market with a mid-year market update, and forecast for 2018 and beyond by Carrington Executive Vice President Rick Sharga, a frequent contributor to national media outlets such as CNBC, FOX Business, the Wall St. Journal, and Housing Wire.
- Elevate Your Performance with Carrington
An introduction to Carrington’s new Non-QM home loan programs that can elevate your performance and assist you in closing more loans for borrowers with less than perfect credit, late payments, recent blemishes on their credit, high balance/jumbo or self-employed borrowers.