CARRINGTON CAN HELP YOU CLOSE LOANS OTHERS CAN’T
Carrington recently closed this Non-QM* loan for a client. Look familiar? Did you recently reject an applicant with a similar file? We approved it!
We have a full spectrum of programs for a variety of loan scenarios, including FHA, VA, USDA, Conventional and Carrington’s Flexible Advantage℠ & Flexible Advantage℠ Plus (Non-QM) loan programs*.
See if Carrington can close that tough loan that other lenders haven’t been able to get done.
Effective Tuesday, June 5, 2018, Brokers may submit loans using lender paid compensation for Carrington Flexible Advantage and Carrington Flexible Advantage Plus products.
*Carrington Flexible Advantage 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.
Carrington Mortgage Services (CMS) offices, including the Lock Desk, will be closed Monday, November 12, 2018 in observance of Veteran’s Day, which is a Federal Holiday. Normal Lock Desk hours will resume on Tuesday, November 13, 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:
- Monday, November 12, 2018 cannot be included in the rescission period for refinance transactions
- Monday, November 12, 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, Monday, November 12, 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 Closing Disclosure (CD) is required, Monday, November 12, 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.
Folks didn’t receive that memo this past week as the threat of rising rates and some not-so-rosy outlooks from firms like Amazon definitely frightened investors, who fled from Stocks.
All three major Stock indices – the Dow Jones, S&P 500 and Nasdaq sold off hard this week and are now flat-to-negative for the year.
Even a better than expected 3rd Quarter GDP reading of 3.5% along with a stellar consumer spending reading on Friday could not help Stocks avoid a selloff at the open.
The Bond market welcomed some of the money from the Stock selloff, thus helping home loan rates improve slightly.
- The markets are very volatile and the improvement in home loan rates this week is relatively modest when considering the magnitude of the stock market decline.
- With home loan rates off the highest levels of 2018 – now is a wonderful time to secure financing.
Last Week in Review:
Rates hit seven-year highs midweek on the heels of a confusing Fed message.
Our Federal Reserve has a dual mandate – to maintain price stability (inflation) and maximum employment. They also have a 3rd “unstated” mandate, which is to maintain market calm.
This past week, the Fed came up a bit short on that “unstated” mandate and created quite a bit of confusion and market turmoil midweek upon releasing the Minutes from the Sept 26th Fed meeting.
In that meeting we learned there is a group of “hawkish” Fed Members that want to hike the Fed Funds Rate more aggressively into 2019. At the same time, there were other Fed members who think the current Fed Funds Rates is “about right” – meaning no more hikes for now. The Fed talking out of both sides of their mouth was a source of confusion for the markets and home loan rates.
Adding to the confusion is the Fed’s very own inflation forecast which suggests inflation will remain close to current levels through 2021. If we recall the Fed mandate to maintain price stability, one could argue there is no need to raise the Fed Funds Rate if inflation is not rising.
Food for thought – If the Fed’s modest inflation forecast comes to pass, we will likely see home loan rates remain near historically attractive levels.
Last Week in Review:
Rates were higher early in the week – but improved on the heels of a soft Consumer Inflation reading and rout in Stocks.
When following the direction of interest rates, one only has to follow the direction of inflation. If inflation is moving higher, rates are going higher. The opposite is also true.
Lately, there has been a growing fear that inflation is threatening to rise due to our tight labor market, strong economy and rising wages. It was this fear that pushed rates higher over the past month, culminating with rates hitting their highest level in over 7 years this past Tuesday.
But come Thursday – the bond market had reason to breathe a sigh of relief and rejoice when the September Consumer Price Index (CPI) was reported lower than expectations. Remember – low inflation is good for the bond market and home loan rates.
It was just last month that Fed Chairman Jerome Powell and the Fed forecasted consumer inflation to remain near current levels through 2021. If this comes to pass, long-term rates like home loan rates can’t rise too much.
Also helping rates improve from the worst levels of the week was a 1,400+ point selloff in Stocks between Wednesday and Thursday. Generally speaking, when investors sell Stocks they park some of those investment dollars into Bonds.
Bottom line – home loan rates, while elevated since earlier this year, remain historically low…especially when you consider how well our economy is performing.
On Friday, October 12, 2018, Carrington Mortgage Services, LLC (CMS) resumed normal operations under the Disaster Policy. CMS will authorize funding in all five states (Alabama, Florida, Georgia, North Carolina, and South Carolina) that were previously placed on hold.
FEMA has declared the following counties in Florida for Individual Assistance.
Incident Period: October 7, 2018
Only those loans in these Florida counties are required to successfully pass re-inspection prior to funding.
Alabama, Georgia, North Carolina, and South Carolina have not declared any individual assistance counties at this time, so re-inspections are not required for properties in these states.
- The only impacted loans are in the counties listed above in Florida. Any loans that already have appraisals in file will require a re-inspection.
- Any loans where appraisal inspections were dated prior to the disaster declaration date will require a re-inspection to be ordered.
Effective immediately, and until further notice, Carrington Mortgage Services, LLC (CMS) will temporarily suspend funding all loans with subject properties in the following Florida and Georgia counties:
This suspension is due to the potential impact of Hurricane Michael that continues to be a major Category 3 storm which is expected to arrive at the Gulf Coast (see path below) Tuesday evening/Wednesday morning.
Please inform your borrower(s) as soon as possible of the funding delay. If there is a signing scheduled, please take steps to cancel those closings until further notice.
Last Week in Review:
August brought mixed results on new home construction and sales of existing homes.
August Housing Starts rose 9.2 percent from July to a seasonally adjusted annual rate of 1.282 million units, above the 1.229 million expected. Single-family starts, which make up the largest share of the residential housing market, were up 1.9 percent while multi-family starts surged 27.3 percent. Housing Starts were flat in the Northeast, but the Midwest, South and West all saw positive gains. Housing Starts were also 9.4 percent higher than August of last year.
Building Permits, a sign of future construction, didn’t fare as well, an unfortunate development for would-be buyers struggling with limited inventory in many areas of the country. From July to August, Building Permits decreased 5.7 percent. They are also 5.5 percent lower than August 2017.
Existing Home Sales managed to stabilize in August after four straight months of declines, the National Association of REALTORS® reported. Existing Home Sales were unchanged in August from July at an annual rate of 5.34 million units, below the 5.37 million expected. Flat sales were due to a balance of gains in the Northeast and Midwest and losses in the South and West. Unsold inventory of existing homes was at a 4.3-month supply, still well below the 6-month supply considered normal. Sales were also down 1.5 percent when compared to August 2017.
Mortgage Bonds have struggled in the latest week due in part to positive gains in Stocks. Home loan rates have ticked higher but remain attractive.
Carrington Mortgage Services, LLC – Wholesale Division is pleased to announce Underwriting updates to our Carrington Flexible Advantage℠, Advantage℠ Plus, & Investor Advantage℠ Non-QM products; effective for submissions dated on and after September 19, 2018.
Please contact your account executive if you have questions.
Last Week in Review:
August Retail Sales rose at their smallest level in six months. Did inflation sizzle or fizzle?
Retail Sales disappointed in August, up just 0.1 percent from July. However, July’s figure was revised higher from 0.5 percent to 0.7 percent. Sales were led by non-store retailers and from receipts at gasoline stations, while consumers cut back on spending for cars and clothing. On an annual basis, Retail Sales were up 6.6 percent from August 2017.
Consumer spending is crucial to the U.S. economy. It will be important to see if August’s numbers are just a hiccup and if sales pick up as we approach the holiday shopping season this fall.
Inflation was also in the news, with wholesale inflation tame in August. The Producer Price Index fell 0.1 percent from July, below the 0.2 percent expected due in part to a decline in food prices and a range of services.
The more closely watched Consumer Price Index (CPI) rose 0.2 percent from July to August, as higher costs for gasoline and rents were offset by declining costs for healthcare and apparel. On an annual basis, CPI rose 2.7 percent for the 12 months ending in August, though this was down from the 2.9 percent annual increase in July. Annual Core CPI, which strips out volatile food and energy prices, rose 2.2 percent year over year in August, down from July’s increase of 2.4 percent.
The key takeaway when it comes to inflation is that inflation reduces the value of fixed investments like Mortgage Bonds. Since home loan rates are tied to Mortgage Bonds, tame inflation can help keep Mortgage Bonds and home loan rates from worsening
For now, despite the tame inflation data, Mortgage Bonds fell in the latest week due in part to the strong Jobs Report for August. Home loan rates remain near historic lows.