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Carrington Mortgage Launches Line of Subprime Mortgages

According to Experian's eighth annual State of Credit survey, 21.2 percent of Americans have credit scores below 600. For these consumers, especially in today's risk-averse lending environment, access to appropriate financing options can be a challenge. Carrington has developed the expertise to qualify creditworthy borrowers with less-than-perfect credit, originate quality loans and service them.

‟For years, we've built our business around serving underserved borrowers – those with credit scores or life's events that make it difficult for them to get a mortgage or refinance loan," said Ray Brousseau, president of Carrington Mortgage Services. ‟Because we manually underwrite each loan, we're able to analyze an individual's personal history, recognize their needs and responsibly lend to them. Our clients, Realtor® and broker partners bring us their challenging loans because they know that we know how to work with these borrowers to help them get their loans and keep them in their homes."

Payment history is one of the most important factors affecting a person's credit score and their ability to get a mortgage or refinance a loan. Experian reports that one in four adults do not always pay their bills on time. A missed payment is the single biggest indicator of credit risk, and has the greatest impact in an individual's credit and ability to secure a loan.

"That's where we come in," Brousseau added. "Not all mortgage companies have the ability to offer loan products in a responsible way to those who don't fit into the traditional lending environment, and we don't want to see a return to the kind of careless lending practices that led to the foreclosure crisis back in 2008. Carrington is an expert in underwriting and servicing challenging loans. We are one of the very few lenders nationally that can truly assist borrowers with low FICO scores and keep their loans performing at a high level."

Who does the Carrington non-prime loans serve? Carrington's new non-agency loan products is an ideal solution for consumers with lower credit scores, high debt-to-income ratios, who are self-employed or who have had a recent credit event – such as foreclosure, bankruptcy, missed credit card or late mortgage payment – and may not be eligible for conventional or government loan products.

Highlights of Carrington's non-prime loans for purchase or refinance programs for prospective borrowers include:

  • Credit scores down to 500
  • Loan amounts up to $1.5 million and cash-out up to $500,000
  • Recent credit events and history of late payments are acceptable
  • Single-family homes, town houses and condos are allowed
  • Bank statements are acceptable to verify income in place of IRS tax documents for self-employed borrowers
  • Cash-out refinance program allows borrowers to refinance higher interest rate loans, pay for home improvements or college, and possibly lower their overall monthly payments.

Carrington also recently lowered its minimum FICO score requirement to 500 for FHA and VA loans to provide the widest possible range of opportunities to help underserved borrowers more easily become homeowners.

"We'd like to be the lender of choice for otherwise qualified borrowers who have less than perfect credit scores, and for the real estate agents and mortgage brokers who work with them," Brousseau continues. "We believe there are millions of Americans who historically would have been able to qualify for a loan, but simply haven't been able to get one since the Great Recession. And we believe they deserve a chance to achieve the dream of homeownership."

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