What’s Happening with Mortgages & COVID – May 2020


hi Linda Urbick with Realtyone Group and
today I have Michelle Paxton which I think many of you have met before on the
call with me and I wanted to have Michelle give us an update on mortgages
and what’s going on how the market is overall, what’s changed, is the process
taking longer. So Michelle take it away. First of all
introduce yourself please I’m not sure if I said Guilld Mortgage and
first up can you talk about the pre-approval is it taking
longer? Hi I’m Michele Paxton loan officer with Guild Mortgage a direct
lender. Yes the pre-approval process is the same nothing has changed we’re just
making sure they’re not on a furlough or they do have a return to work date in
less than 30 days. But the pre-approval process is still the same. So when you
said they’re on a furlough they’re not out of furlough and they’re going back
to work in 30 days but if they can’t get back to work they have to get back
to you have to pre-approve them again, you know let’s say that 30 days is up?
Yeah so I could get them pre-approved and if they
haven’t returned to work then we’re just going to wait. Obviously they can’t go in a
contract you need to wait until they go back to work and they get a pay stub.
So are the requirements for getting a mortgage now harder?
I read stuff and everybody else is watching the internet so it’s harder now
it’s really harder to get a mortgage is that true? Well on refinances you know
they’re probably taking 45 days or more on refinances I think they’re caught up
now with processing and underwriting on these finances but they are taking longer
and they’re not prioritized compared to purchases. Purchases are always going to
be a priority. Certain things are taking longer because they’re shut down and
working from home such as tax transcripts we can’t access them from 3rd
parties so we have to have the customer go online and access tax
transcripts.We still have a few appraisers out there
that are limited to certain areas or they don’t want to go inside the home
and so you’ve got you know a smaller group of appraisers to pick from and of
course they’re getting backed up so there’s just a little delay there but
purchases are still 30 days but there’s little hurdles you know making sure that
they’re still employed that their still an active employee and that if
they are furloughed what is their return to work date. You just touched on
something else about the appraisals. If an appraiser can’t get into the house I
know in some areas they were letting them do an exterior and then looking at the
Realtors pictures etc, are you allowing that? or is that not just your company
but is that the norm around here? Yeah you know the refinances we’ve been doing
exteriors that hasn’t been a problem there’s certain programs that do require
a full appraisal and that’s do you need to get a full appraisal. It depends
on the program or product I should say but you know there is a workaround for
all these things that are popping up due to COVID. I know you guys have COVID
addendums we’ve got some new COVID condition but but there is a workaround
for every issue that has risen. How about the interest rates still fantastic? they
are oh my goodness yeah I think on Thursday it was like on a conventional
conforming loan amount below $510K whether it was a purchase or refinancing
who’s like 2.99 at a small cost so anywhere from like three to three and a
quarter on a 30-year fixed is where they’re at. The adjustables are a little
bit higher; investment properties are a little bit higher but even the
investment properties they’ve been fluctuating between the high threes up
to the high fours. Great last time we talked there was jumbo mortgages were
pretty much gone, are they back? Jumbo’s overall are still suspended we did get one jumbo
investor back the guidelines are a little tight. They want a little more
or down the interest rates a little bit higher but we do have jumbo one jumbo
lender with a handful of products available and we hope they temporarily
suspend and then they come back soon because I know we need them in the Bay
Area. Right down payments anything changed on that since we last
talked? No actually the down payment programs are the same I think the only
thing that has changed is minor guidelines the FHA and VA FICO scores
have gone up a little bit but the down payment is still the same on the FHA VA
USDA and the conventional conforming and high balanced loans obviously with the
Jumbos I think we talked about that last time we were doing a first and a second
The first can go up to $765K and those seconds are probably anywhere from 350K
to 500K on a second mortgage but they want 12 months reserves which usually
about six months reserves. The other thing is and I
know we didn’t I didn’t talk about this is I think a lot of people are very
confused about forbearance that it looked like it was an easy thing to do to get
but I don’t think a lot of people understand the reprecussions of it that if you go into forbearance and decide you want to buy another house or refi you
you have to wait, is that true? Yes you know they keep changing the
guideline weekly or it changed it maybe three times in the past week. What it was
is each lenders going to be a little bit different so when you contact your
lender to skip payments, skip payments is called forbearance, and they’re allowing
some of them three months some of them I think up to twelve months. Once
that period is over then they did have to wait a year but I just got an email
actually this morning and if I’m clear if I’m correct they are
waiting three months so let’s say August is the end of their skip payment period
then September October November December is when they’re able to refinance.
they want people to be able to refinance and grab these low interest rates. So
Fannie and Freddie did come out with a guideline just today so it’s three
months after the forbearance period is up. And is doing the forbearance going to
hurt someone’s credit? No absolutely not. Okay so the final question is, what is
your overall view of the market and where we’re going? Yeah I know right and
I think it’s all a matter of opinion but I think I’ve been in the industry long
enough to kind of get an idea and having going through the last two market
crashes it concerns me a little bit and I hope we’ve learned a lot from the last
market crash looks like they’re doing a lot of things to avoid what happened
before and I’m just hoping we get out of this soon so we can recover sooner
because every month you know when mortgages and rents are due on the
first they are keeping a keen eye to see which customers and which mortgages the type
of product and that is skipping the payments doing the forbearance or what
have you you know if it looks like a lot of people have FHA mortgages
are doing these skip payment plans them that’s where they’re going to tighten
the guidelines. whoops I think I just I hit a button on my keyboard. Careful what
you say we still hear you. yes so anyway I rates are going to stay the same they’re
bearing state able they’re gonna stay the same through the summer and
hopefully into the fall so those people can still continue to refinance that
have done the forbearance or skip payments I have a feeling we might see
price drops I don’t know you would probably be better to answer that this
coming winter. Yeah well who know we don’t know there’s a lot of these
certain surveys and people saying that when this opens up that we’re going to
be flooded the demand is there, there’s going to be more buyers than there are
sellers but that’s who knows you know no one really knows what’s gonna happen and
we’re hoping for the best. Yes exactly Well thank you so much Michelle thank
you very much Linda this was pretty informative and if you’re looking for Michelle’s
information you can find it right below this video thanks for watching. thank you.
have a great day

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