A new residential loan offering is targeted at prospective borrowers with low credit scores, high debt-to-income ratios and significant recent credit events.
The new nonprime program
caters to customers seeking to finance a home purchase or refinance an existing mortgage but who don’t qualify for conventional or government products.
Borrowers can have credit scores as low as 500 with the non-agency program. They can also have recent credit events like foreclosures and bankruptcies on their records.
Behind the new products is Carrington
Mortgage Services, which announced the offering Tuesday.
“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,” Carrington Mortgage Services President Ray Brousseau said in the statement. “Because we manually underwrite each loan, we’re able to analyze an individual’s personal history, recognize their needs and responsibly lend to them.”
While Carrington said high DTI ratios are acceptable, it didn’t specify how high they can be.
On self-employed borrowers, bank statements can be utilized to verify income instead of IRS tax documents.
Loan amounts can be as high as $1.5 million, and cashout amounts can be as high as $500,000.
Acceptable properties include single-family homes, townhomes and condominiums.
Anaheim, California-based Carrington noted that there are roughly 100 million U.S. consumers with less than perfect credit.
Brousseau added, “We don’t want to see a return to the kind of careless lending practices that led to the foreclosure crisis back in 2008.”