Government Shutdown Update – USDA Rate Locks

January 15, 2019rashtonBulletins, Bulletins

Overview

The USDA has advised that during the current government shutdown, the Rural Housing Service will not guarantee loans that do not have a conditional commitment issued before the loan is closed. Due to this situation, and effective immediately, Carrington Mortgage Services, LLC (CMS) will NOT accept rate lock requests or issue lock confirmations on USDA loans until the government shutdown ends and the USDA resumes normal business operations.

Please contact a Carrington Account Executive if you have questions.

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. 

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.

Updated Loan Setup Submission Acceptance Process – Broker Disclosed Loans

December 20, 2018rashtonBulletins, Bulletins

Overview

Effective January 2, 2019, Carrington Mortgage Services, LLC (CMS) Wholesale will update the Submission Acceptance process on Broker Disclosed Loans as follows:

A Broker may submit a Clerical Revised Loan Estimate to correct information located on page 3 of the Loan Estimate, within three (3) business days of the submission. CMS will no longer reject the submission for missing or inaccurate:

  • Late Payments
  • Assumptions
  • Servicing Transfers

A Broker may submit a Revision Requested by Consumer, Revised Loan Estimate within three (3) business days of the submission, to correct for under-disclosed or missing fees such as:

  • Underwriting Fees
  • Tax Services
  • Collateral Desktop Analysis (CDA) fees  – Carrington Advantage products only
  • Survey Fees
  • 203k Lender Fees

Note: This process does not apply for inaccurately disclosed Broker Compensation, Third Party Processing Fees, Transfer Taxes, Recording Fees, or Settlement Charges.  Re-disclosure of Transfer Taxes, Recording Fees, or Settlement Charges will require a valid change of circumstance (COC) in order for the amounts to increase.  CMS will continue to reject Broker Disclosed submissions with under-disclosed Broker Fees or Settlement Charges.

Maryland HPML Attestation

December 19, 2018rashtonBulletins, Bulletins

Overview

In compliance with Maryland Mortgage Statue 09.03.06.20 – Duty of Care, Carrington Mortgage Services, LLC (CMS) will require the Broker / Loan Officer to provide an executed HPML Attestation (refer to sample provided) for all Carrington Flexible Advantage and Flexible Advantage Plus Higher Priced Mortgage Loans (HPML) with a subject property in the state of Maryland.

Mortgage Brokers must provide the HPML Attestation form on their company letterhead. They may use the verbiage provided on the sample Attestation or use an Attestation created by their legal counsel.

The sample attestation form should be published on BrokerIQ under Useful Forms.

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.

Low Rates Return

December 10, 2018jordanreedBulletins


Last Week in Review:
 
Summer Rates Return

As it pertains to low rates, be careful what you ask for – it will likely take pain, chaos, fear and uncertainty to get them. 

This past Thursday, thanks to uncertainty around the U.S. and China trade deal, fear of slowing global economic growth, a roughed-up Stock market and the likelihood of fewer Fed rate hikes, the Bond market and home loan rates hit their best levels in three months. 

On Friday, the Labor Department reported that 155,000 jobs were created in November, a bit less than expectations of 189,000. The labor market remains incredibly strong and wages are rising at fastest pace in a decade. 

Low rates coupled with a solid labor market and rising wages make for great home purchase conditions.

It appears the highest home loan rates for 2018 are behind us and with low inflation and low bond yields in Europe and Asia, our home loan rates should not go too high for the foreseeable future. That is great news as we head into 2019. 

2019 Wholesale Underwriting Fees

December 6, 2018rashtonBulletins, Bulletins

Overview

Effective January 1, 2019, Carrington Mortgage Services, LLC (CMS) will implement the following Underwriting Fee schedule for all wholesale loan submissions:

Broker Disclosed Loans: All broker-disclosed submissions must include the updated underwriting fee listed on the broker’s initial Loan Estimate.

When Loan Setup receives a broker-disclosed submission without the underwriting fee disclosed correctly and the loan has not been locked, Setup will give the broker/AE an opportunity to pre-lock the loan with a Fee Buyout prior to rejecting the submission.

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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