Carrington Mortgage Services LLC is upping the ante in its ongoing push to streamline loan closings.
The wholesale lending division of the company recently announced that it is expanding a program that guarantees a loan closing within 30 days to include another that promises a closing in just 21 days.
“Our new 21-day loan closing program will put our brokers in a position of competitive advantage in today’s hypercompetitive mortgage market,” said Ray Brousseau, executive vice president of Carrington Mortgage Services LLC’s mortgage lending division. “This program will allow mortgage brokers to provide loans to more borrowers, more quickly than any competitive program we’re aware of — another example of our commitment to the wholesale channel.”
The 21-day program — which joins a 25-day program in Carrington’s retail lending division in addition to the 30-day program in its wholesale division — applies to FHA and conventional purchase loans, and offers “wider qualifications and fewer restrictions,” Carrington said in a statement.
Like its 30-day Purchase Promise Program, the 21-day Purchase Promise Program offers a $995 closing credit if an enrolled loan doesn’t close before the program’s deadline.
A wider range of borrowers may qualify for the twin 30- and 21-day programs than the original 30-day program, since Carrington has also recently loosened its eligibility requirements.
Carrington said it has lowered its credit score requirement for an FHA loan from a FICO score of 640 to 600 and reduced its requirement for a conventional loan from 700 to 620.
In addition, borrowers with a loan-to-value ratio of 95 percent or less with a FICO of 680 (down from 700) may now qualify for a Carrington mortgage. Previously, the loan-to-value ratio requirement was 80 percent or less.
The programs also may be an option for more borrowers than the original program because Carrington recently has:
- designated the manufactured housing property type as eligible for FHA and VA loans.
- removed overlays for FHA first-time homebuyer loans.
- devised unconventional credit guidelines for FHA borrowers who may have insufficient credit.
- made conventional loans eligible for second-home and non-owner-occupied purchases.
Carrington said by placing loans on a predictable fast track, the 21-day program will reduce the likelihood that a sale falls through due to a buyer’s inability to close in a timely manner.
The company noted that the average closing time of a purchase loan is 46 days and the average closing time of a refinance is 49 days, according to a report from Ellie Mae, a provider of mortgage origination software.
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