Mortgage

Carrington opens mortgage lending to borrowers with bad credit

1 in 3 consumers have FICO scores below 650

Carrington Mortgage Services once again announced new initiatives to assist underserved borrowers and launched the national availability of "The Carrington Loan."

The Santa Ana, California-based lender made headlines earlier this year when it chose to lower its minimum FICO score to 550 and expanded its guidelines on a number of FHA, VA and USDA loan programs.

What’s significant about this new product is that it continues to reaffirm the lender’s focus on home purchases for borrowers in the sub-640 FICO score range.

When Carrington originally announced that it would lower its FICO score requirements, it made the choice to also pull back in other areas and eliminate conventional and jumbo loans from its wholesale product line. It also limited its acceptance of wholesale submissions with FICO scores above 680, except for VA loans.

The features of this new loan include:

  • There are no closing costs, appraisal fees or lender financing fees
  • Carrington pays all eligible loan coats as lender credits
  • If any unanticipated lender costs arise, Carrington will issue a credit to cover them. This may include additional title or escrow service charges from the title or settlement company

According to the report, one in three consumers has a FICO credit score below 650.

“Many underserved borrowers, including first time home buyers, still view the path to a mortgage loan as unattainable, complex and often cumbersome. The Carrington Loan simplifies the process and improves the experience to help remove the anxiety, particularly for those who do not have sufficient cash on hand to pay closing costs,” said Carrington Mortgage Services mortgage lending executive Ray Brousseau.

“With The Carrington Loan, there is no need to modify the rate after it is presented to the borrower to offset loan costs and loan closing fees, and unexpected increases to estimated closing costs are not an issue. Removing these barriers greatly alleviates the stress on borrowers who desire to fulfill their dream of homeownership.”

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