Guardian Residential Lending Industry News, March 19-26, 2020

Guardian Residential Lending Industry News, March 5-12, 2020
March 12, 2020
Guardian Residential Lending Industry News, March 26-April 2, 2020
April 2, 2020
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In the Know: A Roundup of This Week’s Local and National Real Estate Stories 

Former Fed Chairman Ben Bernanke sees ‘very sharp’ recession, followed by ‘fairly quick’ rebound (CNBC, March 25)

Former Federal Reserve Chairman Ben Bernanke sounded an optimistic tone on the longer-term state of the economy, predicting in a CNBC interview Wednesday that while the U.S. is facing an acute recession, it shouldn’t last.

“It is possible there’s going to be a very sharp, short, I hope short, recession in the next quarter because everything is shutting down of course,” he said on “Squawk Box.”

“If there’s not too much damage done to the workforce, to the businesses during the shutdown period, however long that may be, then we could see a fairly quick rebound.”

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Mortgage Help for Homeowners Impacted by the Coronavirus (FHFA, March 23)

Fannie Mae, Freddie Mac (the Enterprises) and the Federal Home Loan Banks are taking steps to help people who have been impacted by the coronavirus.   If your ability to pay your mortgage is impacted, and your loan is owned by Fannie Mae or Freddie Mac, you may be eligible to delay making your monthly mortgage payments for a temporary period, during which:

-You won’t incur late fees.

-You won’t have delinquencies reported to the credit bureaus.

-Foreclosure and other legal proceedings will be suspended

If you have trouble catching up at the end of this temporary relief period, additional assistance may be available.  You can work with your servicer to resume making a mortgage payment.  Or if you need additional assistance, you can work with your servicer on other foreclosure prevention options to keep your home.

Contact your mortgage servicer (the company where you send your monthly payments) as soon as possible to let them know about your current circumstances. The telephone number and mailing address of your mortgage servicer should be listed on your monthly mortgage statement.

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Fed announces a slew of new programs to help markets, including open-ended asset purchases (CNBC, March 23)

The Federal Reserve announced a barrage of new programs to help keep the market functioning.

Among the moves is an open-ended commitment to keep buying assets under its quantitative easing measures.

There are multiple other programs, including one for Main Street business lending and others aimed at keeping credit flowing.

The Fed will be moving for the first time into corporate bonds, purchasing the investment-grade securities in primary and secondary markets and through exchange-traded funds.

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Fannie Mae, Freddie Mac relax appraisal, employment verification standards in wake of coronavirus (HW, March 23)

Will allow drive-by and desktop appraisals in certain circumstances

the FHFA has directed the GSEs to begin using both drive-by appraisals and desktop appraisals in certain circumstances to ensure that the mortgage process is not held up due to appraisal issues. “Effective immediately, we are allowing temporary flexibilities to our appraisal inspection and reporting requirements,” Fannie Mae said in an announcement sent to lenders Monday morning.

“We will accept an alternative to the traditional appraisal required under Selling Guide Chapter B4-1, Appraisal Requirements, when an interior inspection is not feasible because of COVID-19 concerns,” Fannie Mae continued. “We will allow either a desktop appraisal or an exterior-only inspection appraisal in lieu of the interior and exterior inspection appraisal (i.e., traditional appraisal).”

It should be noted that the change to the GSEs’ appraisal policies mostly affects purchase mortgages. For a more detailed breakdown of the policies, click here.

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Bipartisan push begins in Congress to allow remote online notarizations nationwide (HW, March 24)

Bill would bring online notarizations to all states

This week, Sens. Mark Warner (D-VA) and Kevin Cramer (R-ND) introduced a bill that would allow remote online notarizations nationwide, which would enable many people to close on a home or conduct other legal activities without compromising their social distancing practices.

The bill, which is entitled the “Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020,” would authorize every notary in the United States to perform remote READ MORE…

Here’s what’s in the $2 trillion coronavirus stimulus bill (CNBC, March 25)

  • Give one-time direct payments of up to $1,200 for individuals and $2,400 for couples, with $500 added for every child, based on 2019 tax returns for those who filed them and 2018 information if they have not. The benefit would start to phase out above $75,000 in income for individuals and $150,000 for couples, going away completely at the $99,000 and $198,000 thresholds, respectively.
  • Boost unemployment insurance, adding $600 per week for up to four months on top of what beneficiaries normally receive from states. It expands eligibility to self-employed people and independent contractors.
  • Create a $500 billion pool of taxpayer money to make loans, loan guarantees or investments to or in businesses, states and municipalities damaged by the crisis.
  • Give $25 billion in grants to airlines and $4 billion to cargo carriers to be used exclusively to pay employee wages, salaries and benefits, and set aside another $25 billion and $4 billion, respectively, for loans and loan guarantees.
  • Provide $17 billion in loans and loan guarantees for unspecified “businesses critical to maintaining national security.”
  • Put $117 billion into hospitals and veterans’ health care.
  • Provide $16 billion for the strategic national stockpile of pharmaceutical and medical supplies.
  • Give $350 billion in loans for small businesses to cover salary, wages and benefits, worth 250% of an employer’s monthly payroll, with a maximum loan of $10 million.
  • Include a tax credit for retaining employees, worth up to 50% of wages paid during the crisis, for businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year.
  • Require group health plans and insurance providers to cover preventive services related to coronavirus without cost sharing.
  • Delay payroll tax for employers, requiring half of the deferred tax to be paid by the end of 2021 and the other half by the end of 2022.
  • Ban companies that take government loans from buying back stock until a year after the loan is paid back.
  • Bar employees or executives who made at least $425,000 last year from getting a raise.
  • Stop President Donald Trump and his family members’ businesses from receiving emergency taxpayer relief. The provision also applies to Vice President Mike Pence, heads of executive departments, members of Congress and their family members.
  • Suspend federal student loan payments through Sept. 30 with no accrual of interest on those loans.

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If the coronavirus has you worried about your mortgage, do these three things (Curbed, March 20)

These steps can help if you’re at risk of missing a payment because of COVID-19

If you have a mortgage and your source of income is threatened by the fallout from the novel coronavirus, you are probably—and understandably—very worried. Take heart that on Wednesday, President Donald Trump announced that evictions and foreclosures on houses backed by government-sponsored mortgage facilitators Freddie Mac and Fannie Mae, or by the Federal Housing Administration (FHA), will be suspended at least through the end of April. Freddie, Fannie, and the FHA back the vast majority of single-family houses. So if you’re in financial trouble, you will be protected, at least through April.

Federal regulators went a step further on Friday by announcing that homeowners impacted by the novel coronavirus fallout could qualify for mortgage payment reduction or deferral if they have mortgages backed by Freddie or Fannie.

READ MORE…

Zillow pauses iBuying nationwide amid coronavirus pandemic (HW, March 23)

The company will pause any plans for expansion, too

After announcing it would pause all iBuying in California only, Zillow has officially put a temporary stop to all of its iBuying practices. Monday morning, Zillow announced it would follow suit to others, and pause iBuying in all 24 markets it operates in.

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Mortgage Rate Madness: They’re Up, They’re Down, Where Will They Land? (Realtor.com, March 23)

Why mortgage interest rates are on a roller-coaster ride

Typically when the economy is struggling, mortgage rates fall. But there’s nothing typical about this period. And there are several financial reasons that rates are seesawing so wildly.

First, it’s a reaction by lenders to the overwhelming throngs of homeowners who have been looking to refinance their mortgages when the rates bottomed out earlier this month. The gold rush was understandable: Some homeowners were able to save themselves hundreds of dollars a month and tens of thousands of dollars over the duration of their 30-year loans after refinancing at lower rates. But the hordes of people looking to lock in such deals turned out to be more than some lenders could handle. Many hiked up their rates to slow down the process,

But the bigger driver of the volatility involves mortgage-backed securities in the secondary market. After lenders make a mortgage, they typically don’t want to hold on to it because it ties up money they could be using to make new loans. So they sell the mortgage loans, which are bundled into a collection of mortgage-backed securities (aka mortgage bonds), to investors in the secondary market.

Investors view mortgage -backed securities similarly to U.S. Treasury bonds. They’re both typically safer, less lucrative investments than the stock market. So with the stock market hurting, investors have traditionally turned to bonds. But now there is a glut of bonds on the market, thanks to the deluge of refis and the federal government issuing more bonds to fund economic stimulus measures. So bond prices are low.

And since mortgage rates are the inverse of bond prices, when bond prices are down, mortgage rates go up.

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Mortgage industry lays out its case for widespread coronavirus emergency relief (HW, March 25)

Industry groups present their plans to the federal government

The groups’ plan calls for mortgage servicers to be able to provide affected borrowers with a 90-day break from their mortgage payments. But the groups note that forbearance period could very well be extended to a full year.

The groups also call for payment forbearance protections including no negative credit reporting, no collection calls or letters, and no late fees. Additionally, the groups ask that payment forbearance be made available to all affected borrowers, including those who were delinquent on the payments prior to the March 13 declaration of a national emergency.

According to the groups, the program would mean a deferral of mortgage payments, not forgiveness. In most cases, the groups say, missed payments would be made at the end of the life of the loan and there would be no interest accrued on the deferred amount.

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Keep it Light / Just for Fun

40 fun finalists from the Comedy Wildlife Photography Awards 2019

The funniest animal photos of 2019.

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Thanks for reading, and be well out there!