Carrington Mortgage Services is eliminating adjustable-rate mortgages from its product menu in all of its channels, effective immediately.
The demand for ARM products at Carrington has been “extremely low,” said its executive vice president Ray Brousseau. “Rates are at quite near historic lows and how much sense does it make to elect an adjustable-rate product” in the current market.
Carrington originates through three channels: wholesale, retail and a centralized lending unit.
Carrington has also shifted its focus to meet the needs of the underserved market, “middle-income America,” including borrowers with credit scores below 640, he said.
The emphasis in meeting the needs of this market concentrates on “simplicity and transparency,” along with making the process easier for these borrowers, and ARM products do not quite fit those goals, Brousseau said.
The company will close all ARMs which have been locked. If the loan has not yet been locked, the application will have to be resubmitted for an appropriate fixed-rate product.
If market conditions and demand in the future for ARMs improve, the company would consider re-introducing these products, he said.