The wholesale lending division of Carrington Mortgage Services is introducing a program that could offer significant appeal to real estate agents fatigued by drawn-out loan application timelines: a promise to close qualified loans within 30 days.
To back up its guarantee, Carrington said that it will offer a $995 closing credit to a borrower if it takes the company longer than 30 days to originate a loan. The program, offered by the wholesale lending division of Santa Ana, Calif.-based Carrington Holding Company LLC, marks the latest effort by Carrington to streamline mortgage closings.
The company’s retail division, which, along with its wholesale division, originates loans in 40 states and Washington, D.C., introduced a similar initiative last month that guaranteed closings within 25 days or less. For that program, Carrington said it would pay a $500 closing credit if it exceeded the deadline.
Carrington said its 30-day-closing program will reduce stress for all parties involved in the mortgage-application process. For real estate agents in particular, it should allow them to receive compensation faster, and reduce the likelihood that protracted closings might sink deals.
The company noted that the average closing time of a purchase loan is 46 days, while the average closing time of a refinance is 49 days, according to a report from Ellie Mae, a provider of mortgage-origination software.
"We’re proud to offer shorter turn times through our wholesale lending division and to bolster broker, agent and consumer confidence with this 30-day closing commitment," said Ray Brousseau, executive vice president of Carrington’s lending division.
FHA, Fannie Mae and Freddie Mac-backed mortgages are eligible for the programs. But some less common products, like VA loans and jumbo loans, are not.