Company News

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.

 
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.

Last Week in Review:
Soothing Words Helps Rates Improve
We heard doves cry this week, when Fed Chairman Jerome Powell spoke in NYC on Wednesday. Doves are people who offer peaceful polices, so upon Mr. Powell's soothing speech both Stocks and Bonds moved nicely higher, with home loan rates hitting their best levels in nearly two months.
Some of Mr. Powell's market-comforting words included:

• We know that moving too fast (hiking rates) will risk expansion
• It may take a year or more to fully realize the effects of hikes
• The Fed doesn't see "dangerous excesses" in the stock market
• The policy rate (Fed Funds Rate) is "just below" neutral

The Fed is still very likely to raise the Fed Funds Rate in December, but the markets took the speech as signs the Fed will not hike rates three times in 2019, which was the Fed's own forecast.
Fed Fund Futures, which represent market opinion on the future of the Fed Funds Rate now suggest there will be only one rate hike in 2019.
The incoming data and more specifically, inflation, will determine whether we see more hikes in 2019.
Bottom line - the present low inflationary environment and slower global growth is helping keep home loan rates historically low.

Last Week in Review:
Stocks crumble, yet rates go unchanged.

The old adage of "Stocks go down, Rates go down" didn't work this past week.
Stocks started the week with the Dow Jones Industrial Average falling nearly 1,000 points through Tuesday.
Typically, as Stocks decline, we see home loan rates improve as the investment dollars find their way into Bonds. That was not the case this week. Bonds and home loan rates hardly moved.
Why? Despite the bad selloff in Stocks, nothing in the U.S. economy has changed, the labor market remains tight, wages are rising, and consumer confidence is high – these are headwinds to further improvement in rates. Remember, rates like bad news.
So, while we have seen home loan rates improve over the past few weeks, the gains may have reached their near-term limit.
Now we are going to watch whether Stocks enjoy a "Santa Clause Rally" to finish the year or if they continue to fall. If Stocks decline another leg lower, we will likely see some modest improvement in rates.
However, should Stocks bounce higher from here, it will likely be at the expense of Bonds and home loan rates could move higher quickly.
Bottom line: Home loan rates have improved nicely the past few weeks and while historically attractive, they are hovering at a near-term bottom.

Last Week in Review: Eurodrama drives "safe-haven" trade.

The long-awaited Brexit agreement was dealt a big blow this past Thursday when two top Brexit officials and four Jr Ministers quit - citing the deal Prime Minister Theresa May reached with the EU was no good.

What does it mean for housing?
The U.S. Dollar, U.S. Bonds and home loan rates benefitted from the Brexit chaos as global investors parked their money in the relative safety of U.S. Dollar denominated assets (currency and Bonds) in what is called a "safe-haven" trade.
The U.S. Dollar had already been rising in value versus other global currencies and there are a couple of effects worth following:

1. A strong U.S. Dollar tamps down inflation as it lowers commodity prices like oil. Have you noticed the recent price decline of gas at the pump? This is like a tax cut for the consumer looking to purchase a home.
2. It makes U.S. imports cheaper. This along with lower oil keeps inflation down, which is good for long-term rates like mortgages.
3. If the U.S. dollar strengthens further, the Fed may not raise rates as expected in 2019 because more hikes would further suppress inflation, which is already tame - again, good for home loan rates.

Bottom line - rates have improved from the worst levels of the year and it is quite possible that the highest rates of the year are behind us.

New Program Gives Originators a Distinct Advantage in the Market

ANAHEIM, Calif. (Nov. 19, 2018) — Carrington Mortgage Services, LLC (CMS), one of the nation’s largest privately held non-bank lenders, today announced the launch of its Correspondent Lending Division. The addition of the Correspondent channel complements CMS’s full portfolio of loan origination channels, which includes Wholesale and Retail.
“We have diligently built the Correspondent Division for success, and we’re now ready to hit the ground running,” said Ray Brousseau, President of CMS. “We’re committed to delivering a high level of transparency and timeliness to the non-delegated correspondent lending process. We understand that it’s all about providing our originators with the ability for further growth and profitability.”
CMS’s diverse product offering is designed to meet the needs of today’s non-delegated originators, and includes conventional Fannie Mae and Freddie Mac products, FHA and VA products, and Carrington’s proprietary Flexible Advantage™ Products which have been developed specifically to meet the needs of underserved borrowers.
“CMS has a proven track record of customer-centric service, combined with quick turn-times for underwriting and purchasing closed loans,” said Greg Austin, EVP of Lending for CMS. “Our non-delegated channel is committed to helping correspondent lenders increase their business by delivering products that allow them to work with borrowers in the underserved and non-QM markets. We also provide exceptional support for borrowers after the sale, and currently service over $60 billion in loans.”
For more information on the CMS Correspondent Program, visit: www.carringtoncorrespondent.com.

The Carrington Mortgage Services, LLC - Wholesale Lending Division Offices and Lock Desk will be closed Thursday, November 22, 2018 and Friday, November 23, 2018 in observance of Thanksgiving, which is a federal holiday. Due to the holiday, the Lock Desk will be closing early on Wednesday, November 21, 2018 at 11:00 AM PST (early market closure of 2:00 PM EST). Normal Lock Desk hours will resume on Monday, November 26, 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:

• Thursday, November 22, 2018 cannot be included in the rescission period for refinance transactions.
• Thursday, November 22, 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, Thursday, November 22, 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, Thursday, November 22, 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 lockdesk@carringtonms.com.

Carrington will be exhibiting at NAMB National, December 8th-10th. Join us at Caesars Palace in Las Vegas, Nevada and stop by booth #906-907 to meet our knowledgeable Wholesale team. Find out how your go-to-lender for the toughest loans is also your one-stop shop to help pump up your pipeline with everything from Government to Conventional and flexible home loans solutions for the underserved and Non-QM markets.
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Come Learn About Our Non-QM Products Join us on December 8th from 3:00 pm – 3:50 pm in the Emperors Ballroom 2 and get the scoop on how Non-QM loan products can make a real difference in increasing your pipeline. We'll explain some of the identifying factors for who fit the Non-QM mold, including those who are self-employed. Hosted by industry veteran Amy Marsh, Business Development Manager for Carrington Wholesale Lending.

Last Week in Review:
Home loan rates modestly improve amidst rout in Stocks.

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.
Bottom line:

• 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.