Carrington Mortgage Services LLC said it will reallocate its resources by eliminating conventional and jumbo products from its wholesale menu and expanding subprime lending.
An announcement Monday from the Santa Ana, Calif.-based company said it will eliminate conventional and jumbo loans from its wholesale product line.
In addition, Carrington plans to limit its acceptance of wholesale submissions that have FICO scores higher than 680 — though no limitations will be placed on loans guaranteed by the Department of Veterans Affairs.
“The company feels strongly that this move is necessary for appropriately allocating its resources to provide optimum support to borrowers in the underserved market,” the statement said.
The move is part of a strategy by the company to refocus on credit-challenged customers — a group that typically includes borrowers with credit scores that are less than 640. Carrington says that the sub-640 group is largely ignored by lenders nowadays.
On both wholesale and retail programs, Carrington said that its minimum FICO score requirement has been cut to 550.
“An estimated one in three consumers has a FICO credit score below 650 according to industry experts,” the news release stated. “For these consumers, and the brokers and agents working with them, obtaining access to appropriate financing options can be a challenge – one that Carrington is uniquely equipped to handle.”
In addition, Carrington’s guidelines on VA mortgages, loans insured by the Federal Housing Administration and mortgages guaranteed by the U.S. Department of Agriculture are being expanded by extending eligibility to more property types and reducing overlays.
Carrington Mortgage Services Mortgage Lending Division Executive Vice President Ray Brousseau said in the statement that the firm’s lending platform and specialty servicing business were created to serve this particular market segment.