Carrington and Newfi are making a similar pitch to brokers navigating higher rates: They intend to keep doing business through the turbulence.
In separate messages, the companies’ chief executives acknowledged pressure on the lending industry while emphasizing the financial backing, and business models supporting their continued investment in Non-QM lending.
The letters arrive at a moment when borrower demand and lender commitment deserve separate consideration. Non-QM production grew in September despite a sharp increase in rates.
Two Arguments For Staying Power
In his letter, Andrew Taffet, CEO of The Carrington Companies, acknowledged the difficult origination environment and the impact of companies’ decisions on industry employees.
Carrington’s response centers on diversification. Taffet said its lending and servicing businesses provide balance across market conditions, while acquisitions of Valon Mortgage and Reliance First Capital have expanded its servicing portfolio to approximately $448 billion.
“Our commitment to the broker and correspondent channels remains strong,” Taffet wrote.
He said the company continues to invest in people, technology, and programs supporting those partners. Carrington completed its acquisition of Valon Mortgage in August and is adopting ValonOS as its core servicing platform.
Newfi founder and CEO Steve Abreu’s letter opens with rising rates and the pressure they are placing on the industry.
“Newfi is a reliable takeout and broker partner that will continue to innovate,” Abreu wrote.
He pointed to Newfi’s Apollo affiliation as a source of strength through volatility and said the company plans to introduce product features designed for a higher-rate environment. The letter does not specify those features or a launch date.
That emphasis on dependable execution follows Newfi’s expansion of its non-delegated correspondent channel earlier this year. In March, the company announced new channel leadership and highlighted investments in programs, pricing, and operational infrastructure.
Growing Demand, Tougher Conditions
The business opportunity remains substantial.
Optimal Blue’s September report showed Non-QM lock volume rising 8% from August, even as total lock volume declined 2%. Non-QM accounted for 12% of production.
During the same month, its conforming 30-year fixed-rate benchmark rose 67 basis points to 7.39%. The figures show Non-QM gaining business through the rate increase, although lock volume alone does not establish lenders’ profitability or funding strength.
For brokers, the other consideration is whether a lending partner will remain available through closing.
Eleven Mortgage exited wholesale and correspondent lending last month with parent Benchmark Mortgage redirecting leadership, capital, and resources toward retail. The departure left brokers with loans already in Eleven’s pipeline facing a compressed path to closing. Benchmark described the decision as strategic.
Neither Carrington nor Newfi identified Eleven’s exit as a reason for its message. Both, however, are putting reliability prominently in front of their lending partners.
Their arguments differ — Carrington emphasizes servicing scale and diversification, while Newfi emphasizes Apollo’s backing — but both make continued participation in the channel part of the sales pitch. With Non-QM demand growing and rates testing the broader industry, certainty of execution is another way to compete for the next loan.
