Caliber Home Loans is a national mortgage lender offering home loan services through its network of consultants, as well as independent mortgage brokers and loan officers. Caliber also collects loan payments for mortgages originated through its own operations and other lenders.
By utilizing behind-the-scenes technology just implemented, Caliber is working to shorten the mortgage loan process from more than 40 days to, in the best of circumstances, as few as 10.
Here’s how Caliber might figure in to your mortgage loan search.
AT A GLANCE
- The third-largest wholesale lender in the nation, working through local brokers and loan officers.
- Offers a full line of home loan products, including its Fresh Start mortgage for borrowers rebuilding their credit.
- Caliber services, that is, collects the payments on, most of its loans. That’s not typical in the industry.
In This Article
- Caliber Home Loans’ business model
- Caliber Home Loans’ product offering
- Caliber Home Loans’ process
- What Caliber Home Loans does best
- Where Caliber Home Loans falls short
Based in the Dallas suburb of Irving, Texas, Caliber Home Loans was formed by a 2013 merger of two distinct brands: Vericrest Financial and Caliber Funding. It is owned by Lone Star Funds, a private equity firm run by billionaire John Grayken. He built his fortune in part by buying delinquent and foreclosed mortgages and employing stringent collection tactics.
Besides making home loans, Caliber services — meaning it collects the payments for — $93 billion in mortgages. The company says it services about 94% of the loans it closes. Because the mortgage servicing business has traditionally had a low profit margin, most lenders sell the rights to collect mortgage payments to other companies. Caliber has gone the other way and purchased the rights to service billions of dollars in loans, many of the mortgages in default or severely past due.
Caliber is also a huge wholesale lender. That means it provides loan products and services to local lenders. Nearly one-third of its total loan volume comes from providing loan services to independent mortgage brokers and mortgage loan officers.
Caliber, through its consumer-direct channel or via brokers and mortgage bankers who use its services, offers a broad platform of home loans including fixed- and adjustable-rate, FHA, VA and USDA loans, refinancing, first-time buyer programs and jumbo loans.
The company also offers financing up to $2 million for investment properties, as well as a mortgage program tailored to foreign nationals seeking to buy a second home in the U.S.
Caliber’s Fresh Start mortgage is for borrowers who have suffered a financial hardship, such as bankruptcy or foreclosure, and are looking to rebuild their credit. The program offers these benefits:
- No mortgage or rental pay history required
- Minimum FICO 580
- Debt-to-income ratio up to 50%
- Loan-to-value up to 85%
Though the Fresh Start program has not been singled out, the lender has come under fire in the past year for other loan programs offered to at-risk borrowers.
In October 2015, The New York Times reported on a Caliber loan modification program that reduced a borrower’s monthly payments for five years but then reverted to the loan’s original payment terms beginning in the sixth year.
“The critics contend the temporary modifications merely enable Caliber to begin collecting payments on a loan that has been delinquent for many months or years, but provide no permanent relief to a borrower whose income has declined because of a financial crisis,” the Times report said.
Caliber responded by saying the company had one of the highest loan-modification rates in the industry and reduced the average borrower’s payments by more than 20%, according to the Times.
» MORE: Best lenders for FHA loans
For borrowers, particularly those in difficult financial circumstances, it’s important always to understand the terms of any loan offer made by a lender. And never allow yourself to be rushed or pressured into a decision.
Considering Caliber’s fees and mortgage rates
Information regarding specific fee amounts couldn’t be found on CaliberHomeLoans.com. General fee information is included on the “Closing Costs” tab.
Offered mortgage interest rates were also not found on the website. Caliber declined NerdWallet’s request for information concerning fees, rates and services.
To explore mortgage loans that might best suit your situation, and to pre-qualify, you’ll need to talk to a loan consultant, either in person or by phone. The lender is licensed in all 50 states and has about 100 Caliber branch locations. Additional inquiries are routed to a national call center or handled through an affiliated broker or independent mortgage banker.
Caliber just released what it calls a “streamlined application, approval and closing experience.” This is not a client-facing, online mortgage process of the kind launched by Rocket Mortgage and other online lenders, but technology employed by its loan consultants on behalf of customers.
In a press release, Caliber says the new procedures will:
- Allow completion of a full loan application in only minutes.
- Provide electronic verification of income, assets and employment — reducing the need for applicants to provide physical documents.
- Offer an approval and closing process that can take less than 10 days on eligible mortgages.
- Caters to borrowers with low credit scores or past financial troubles.
- Offers a large number of loan products.
- In June, The New York Times reported Caliber was under investigation for its handling of delinquent mortgages and other practices.
- The company has a customer service rating that is well below average, according to J.D. Power.
Caliber was included in the J.D. Power Primary Mortgage Origination Satisfaction Study for the first time in 2016. Out of 18 lenders, it ranked 16th, garnering two “Power Circles” out of five for overall satisfaction and rated as among “the rest.”
The lender received the lowest two-circle rating in all six categories: loan offerings, application/approval process, interaction, loan closing, onboarding and problem resolution.
NerdWallet’s star ratings for mortgage lenders are awarded based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.