Shelter Six:  Mortgage Industry Continues to Find a Way

The riskier side of the mortgage industry is changing drastically. The Non-QM industry disappeared overnight last Monday. Rates have surged on low-down payment loans. Few lenders are still doing Jumbo loans or purchase-money 2nd HELOC’s. FHA minimum credit scores are increasing.

The mortgage industry has been extremely resilient over the last few weeks though and continues to adapt and get loans closed despite the current environment, as evidenced by a shift to exterior-only appraisals, more flexible verifications of employment, and e-recording of deeds.

Inflation has fallen as the economy has slowed, which is good for rates short-term.

Congress passed the $2.1 Trillion CARES Act, an unprecedented stimulus relief package providing relief to both individuals and businesses, but not necessarily good for rates long-term.

The stimulus package gives mortgage holders the ability to pursue a forbearance, which is the temporarily suspension of a mortgage payment due to a borrower verbally attesting to an inability to make a payment (no written evidence required).

Please understand that a forbearance is a type of default and that anyone pursuing a new purchase or refinance mortgage can’t have a forbearance request in process. The borrower has to choose between pursuing the forbearance or the new mortgage.

Rate Update

Mortgage rates stabilized and didn’t change much last week after the Fed announced an unlimited bond-purchase program to make sure every mortgage bond seller has a buyer.

This Week

The coronavirus continues to dominate financial market news. Economic data is expected to reflect the negative impact of the epidemic to a greater degree. Employment figures are due out on Friday.

March 30, 2020 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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