Carrington Mortgage Services will now offer subprime mortgage loans according to a recent report. The company looks to tap into a market of borrowers with credit scores below 640.
"It had been serving lower credit score borrowers through its capabilities as a Ginnie Mae issuer to do Federal Housing Administration, Veterans Affairs and U.S. Department of Agriculture mortgages, Ray Brousseau, Carrington's president, said in an interview," according to National Mortgage News.
"We've been growing year over year over year; it's treated us very, very well."
Due to the diligence that needs to go into approving these clients, subprime mortgage loans are manually underwritten. Underwriters are given the task to decide whether or not the borrower will be able to make their payments on time.
"Carrington will also be retaining the servicing rights on these loans. Its servicing shop is accustomed to working with borrowers under stress and keeping those loans performing," according to the NMN report.
"It is not just making the loan but making sure that loan performs over time," said Brousseau.
To learn more about Carrington's decision to move forward with subprime mortgage loan offerings, click on the image above.