Company News

Last Week in Review: A Great Housing Backdrop
Many are wondering what lies ahead for housing as we enter 2020.
There are many reasons why the U.S. housing sector should do well for the foreseeable future, but here's three main reasons for the bright outlook:

1. Housing Starts are improving. This is especially true for single-family homes, which have risen for five consecutive months. This trend suggests anticipated buying demand.
2. The labor market remains strong. Rates don't buy homes, jobs do. 50+ year low unemployment at 3.6%, coupled with rising wages makes for a wonderful housing backdrop.
3. Low home loan rates for longer than most expect. Rates don't buy homes, but they definitely help more people participate in buying a home. With inflation running beneath the Fed target of 2.00% for the foreseeable future, there should be no upward pressure on home loan rates.

Bottom line: there is no recession in sight. The backdrop for housing is more of a Goldilocks scenario and makes for a wonderful time to purchase a home.

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.

Last Week in Review: The Definition of Goldilocks

"Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2% objective as most likely." -- Fed Chairman Jerome Powell, 11/13/2019
This quote from our Fed Chair on Capitol Hill this past week was the definition of a "Goldilocks Economy" and reaffirmed the markets that there is no recession in sight!
Thanks to this strong economic backdrop, Mr. Powell also said it's highly unlikely the Fed will cut rates again in December. Remember, Fed rate cuts don't affect home loan rates, so don't expect a sharp uptick in mortgage rates. Why?
As the Fed's quote states, inflation remains low and near the Fed's target. If inflation moves higher, home loan rates move higher. The opposite is also true.
Bottom line: home loan rates improved from the worst levels of the week and head into mid-November still hovering near three-year lows. What an opportunity when coupled with the Goldilocks backdrop.

Last Week in Review: How Fast Rates Can Change

Right now, the biggest news story to follow is the U.S. and China trade negotiations.
This past week, home loans started inching higher but were "saved" momentarily midweek when reports came out suggesting a delay of a "phase one" trade deal signing. Remember that Bonds and home loan rates like bad news, so a disruption or delay of the trade signing was the reason for rates to improve off the worst levels midweek.
However, come Thursday, word that both the U.S. and China would roll back tariffs as a deal gets put together was very good news which pushed Stocks to all-time highs at the expense of Bonds and home loan rates.
Even with the recent uptick, home loan rates are at the same level they were at back on July 31st when the Fed cut rates for the first time in 10 years. The Fed has since cut rates two more times and home loan rates have not improved any further.
A word of caution: long-term rates like mortgages can move up very fast, and it is in a complacent environment like today when things suddenly change. Using history as an example, the 10-year Note yield has traded at 1.40% or lower on three separate occasions in the past seven years. In the two previous times -- 2012 and 2016 -- the 10-year yield quickly spiked to 3% and 2.75% respectively in just six months. This sharp move higher in yield also weighed on home loans, which also rose sharply.
Bottom line: for those considering a new mortgage, now may be an opportune time before this window closes.

See how uploading conditions has changed

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.

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.

Last Week in Review: Fed Takes Action

This past week the Federal Reserve cut the Fed Funds Rate for the third time this year, by .25%. Along with the rate cut, the Fed released a statement that suggested a "pause" in further cuts, but stated they will be ready to act again should "slowing global conditions" continue or if inflation declines further.
Speaking of inflation, it is important to remind ourselves that the Fed rate cut does not affect home loan rates. Home loan rates are slightly higher than they were right before the Fed started cutting rates in July. The main driver of long-term rates is inflation. If inflation goes up, long-term rates go up. The opposite is also true.
With that said, here's an important quote from Fed Chairman Jerome Powell yesterday: "I think we would need to see a really significant move up in inflation that's persistent before we would consider raising rates to address inflation concerns." This means that the Fed is not likely to hike rates anytime soon, and long-term rates should not go too high too soon either because there is no threat of high inflation at this time.
Bottom line: home loan rates are near three-year lows and this week's modest price improvement can be quickly erased should good news regarding U.S./China emerge.

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.
 
[btn link="/state-specific-broker-disclosures" color="crimson" size="size-l"]SEE STATES HERE[/btn]

Last Week in Review: The Remedy for Higher Rates

This past week home loan rates were essentially unchanged from the previous week, breaking a trend of higher rates since the beginning of October.
Bonds hate good news and there is still plenty to go around:

• U.S./China trade dispute progress
• Brexit progress
• Corporate earnings remain positive, as does the economic outlook
• Fed rate cut coming -- more on that below

If the week was filled with good news, then why did Bonds and home loan rates remain steady?
There's an old saying, "the cure for higher rates, is higher rates", meaning that the recent uptick in rates was enough to attract investors searching for higher yield to buy Bonds, thereby halting the increase in rates.
Before we start celebrating and thinking we are on the road to lower rates in the days ahead, the Bond market must deal with a jam-packed week of news next week. The headline risk can easily cause the recent increase in rates to resume.
Bottom line: home loan rates remain near three-year lows, but up a bit from where they were at the beginning of October. As we head into a very important news week, if you are considering a home loan now is a terrific time to seize the opportunity before it goes away.