What Happens Next In Mortgages?
Smart guy asked me what will happen next in housing and mortgages
I have ZERO special insight into the progress of the virus
I was hopeful before we would be spared the worst but its clear now the virus and economic disruptions are here
2/
Smart guy asked me what will happen next in housing and mortgages
I have ZERO special insight into the progress of the virus
I was hopeful before we would be spared the worst but its clear now the virus and economic disruptions are here
2/
/2 Real Estate sales will slow drastically starting right now
Home purchases set to close have a timeline
The average gap from purchase to closing in our office is 48 days
Sales closing in the next 2 weeks should be fine after that there are some concerns
3/
Home purchases set to close have a timeline
The average gap from purchase to closing in our office is 48 days
Sales closing in the next 2 weeks should be fine after that there are some concerns
3/
3/ a few appraisers will decline to enter houses
A few law offices will close
Some movers will cancel
Some buyers will experience lay offs and when the bank calls their employer to confirm status the employer may say "we don't know when we will reopen" so.........
4/
A few law offices will close
Some movers will cancel
Some buyers will experience lay offs and when the bank calls their employer to confirm status the employer may say "we don't know when we will reopen" so.........
4/
/4 What will Private Mortgage Lenders do?
Unlike banks who are very focused on reputational risk private lenders can just say "we are not funding that mortgage we committed to"
Now this is a TINY segment of purchases but it will likely happen
Sue the private lender?
5/
Unlike banks who are very focused on reputational risk private lenders can just say "we are not funding that mortgage we committed to"
Now this is a TINY segment of purchases but it will likely happen
Sue the private lender?
5/
/5 That takes 2 years and deep pockets so yeah, many private lenders who cancel won't worry about those consequences
On the pure mortgage brokerage side, we are digital so never meet anyone
The banks have set up "work from home" for their employees years ago
6/
On the pure mortgage brokerage side, we are digital so never meet anyone
The banks have set up "work from home" for their employees years ago
6/
/6 Mortgage processing is all digital, it's just the exchange of documents so no interruptions there at all
Heck, at some lenders the entire underwriting group have been home based for years
Renewals and refinancing of mortgages won't be effected
7/
Heck, at some lenders the entire underwriting group have been home based for years
Renewals and refinancing of mortgages won't be effected
7/
7/ The key issue that will effect purchasers who WANT to close will be employment
If they are tenured teachers who are told to stay home no problems at all
If it's the Assistant Manager at a restaurant who is laid off and return date unknown: likely mortgage cancelled
8/
If they are tenured teachers who are told to stay home no problems at all
If it's the Assistant Manager at a restaurant who is laid off and return date unknown: likely mortgage cancelled
8/
8/ That's harsh but real, big banks may likely be more supportive of that situation but some FIs will say no
And some Purchasers will want to cancel because their employment dissolved
And that's new to me, it's not like they just thought they over paid, they're in trouble
And some Purchasers will want to cancel because their employment dissolved
And that's new to me, it's not like they just thought they over paid, they're in trouble
