Carrington Mortgage Services is launching a new borrower-education tool that’s designed to remove any and all ambiguity from the lending process and is making the tool mandatory for all borrowers.
Beginning this month, all Carrington borrowers will be required to complete the new MyLoanDetail program before their loan is funded.
The aim of the MyLoanDetail program is to fully educate borrowers on the terms of their loan and their responsibilities as a borrower. In order to provide borrowers with as much insight as possible into their responsibilities, MyLoanDetail reviews transaction costs, down payment amount, mortgage loan principal amount, term of the loan, interest rate and monthly loan payment, as well as what happens in the case of missed or late payments, Carrington said.
The program also provides a short explanation of the mortgage process and requires confirmation of the borrowers' understanding of their specific loan. The program includes key mortgage concepts and terminology, an introduction to the professionals involved in the process and their roles, as well as a review of the borrower's loan details and payment information.
Borrowers are also asked to confirm the accuracy of information provided in their loan application and are given an opportunity to provide additional information that may be important in processing the application and verifying their ability to repay.
As part of the program, borrowers’ mortgage payment options are outlined, along with budgeting details including non-housing related living expenses and other monthly debt payments.
“Extending credit to clients in the underserved market requires a heightened sense of dual responsibility – and that begins with more effective borrower education through resources such as MyLoanDetail," said Carrington Mortgage Services Mortgage Lending Division Executive Vice President Ray Brousseau.
"As the industry does more to help potential borrowers understand how the lending process works and their specific responsibilities, lenders' ability to meet the needs of a larger population and originate more loans to more customers will improve,” Brousseau continued.
According to Carrington, nearly 10,000 borrowers successfully utilized the MyLoanDetail program while it was in beta and the program rolled out officially on April 1.
"The month kicks off National Financial Literacy Month, a national month-long initiative to help consumers take increased responsibility for their personal finances," Brousseau said. "We recognize the value of this initiative and the significant financial undertaking involved in owning a home. We are delighted to help borrowers better understand their financial commitment for the duration of their loan."