Lender update: Coronavirus & Current mortgage rates

As the COVID-19 virus wreaked havoc on the world’s financial markets and disrupted a red-hot American economy, the mortgage industry in the United States has had to respond to a variety of unanticipated challenges and changes.

The good news is we are still here and working to serve our customers and business partners.

As you may already know, when news of the COVID-19’s potential impact on American business was made known, the stock market tumbled, and bond yields reacted. That sent interest rates, which were already quite low, to even lower levels (at least for a couple of days) that had not been seen in decades.

As rates attempted to adjust back, the Federal Reserve cut short-term interest rates to stop a potential crisis in the economy. Instead of giving home sales a boost in the arm, and to increase confidence in the housing market, it created a wave of refinance applications which have pushed many large lenders, banks and credit unions to their maximum capacity.

The stories of waiting eight weeks to close, getting sudden last-minute conditions from underwriters, delaying appraisals and lenders tightening guidelines (on popular loan products) are real. In addition, with so many people hopping from lender to lender to try and save .125% on a refinance, many lenders now require that a loan be completely approved by underwriting before you can lock in your interest rate.

But behind the very public displays of economic doom and gloom on the news, Americans are still buying homes and Realtors are still meeting their client’s needs in a variety of creative and effective ways. If there is any professional that illustrates the best of the entrepreneurial spirit, it’s the real estate agent.

As an independent Mortgage Broker, I want to share a list of items that a homebuyer or Realtor may find helpful. These might shed some light on what is occurring in our industry.

1. Conventional Loans – Business as usual. Rates are excellent.
2. FHA and VA Loans – Many guidelines have been tightened or temporarily revised. Rates have been increased but are still good. Please get pre-qualified and give yourself some extra time to get ready for the process. Make sure you understand what will be required for approval and how temporary guidelines may impact qualification.
3. Appraisals – Appraisers are temporarily allowed to do drive-by or desk appraisals. Agents may get calls from Appraisers for clarification or additional information on a listing. If a home has some significant features that an appraiser may miss, please let your loan officer know.
4. Mortgage Broker Access – We still have access to dozens of lenders who do not have a retail business. Their capacity is fine, and they are closing on time in 21-30 days.
5. Verification of Employment – Lenders are confirming employment status within 24 hours of closing. Make sure lenders have a good contact number for your HR department.
6. Payment Deferments – Deferred mortgage or auto payments must still be included in your monthly debt assessment.

As always, I am just a phone call away for buyers and Realtors who need to consult on any issues regarding home mortgage financing.

Atlantic Trust Mortgage’s Mark Sherman has been a licensed mortgage broker in Florida since 1989. Davidson Realty is proud to work with Atlantic Trust Mortgage to make the lending process as smooth as possible for customers.

Looking for more information? Contact Mark today at 904-509-8272 or mark@atmfl.com.