GSEs unveil new payment deferral option for loans in forbearance
Brutal combination of factors is leaving borrowers behind
Before the coronavirus truly took hold in the U.S., the interest rate for a 30-year fixed-rate mortgage had never been below 3.31%. But as February turned to March, global economic uncertainty drove those rates below 3.3% for the first time ever.
And while rates briefly pushed back up above 3.5% in mid-March, rates recently fell back to new record lows, hitting 3.23% in the week ending April 30, 2020.
But as those rates fell, making getting a mortgage a more enticing option for people, it also became much harder for certain people to get a loan.
To ensure homeowners and renters have the most up to date and accurate housing assistance information during the COVID-19 national emergency, today the Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), and the Department of Housing and Urban Development (HUD) launched the new mortgage and housing assistance website, cfpb.gov/housing.
FHFA and HUD are offering extensive CARES Act assistance and protection for Americans having trouble paying their mortgage or rent during the COVID-19 national health emergency. This joint website consolidates the CARES Act mortgage relief, protections for renters, resources for additional help, and information on how to avoid COVID-19 related scams. It also provides lookup tools for homeowners to determine if their mortgage is federally backed, and for renters to find out if their rental unit is financed by FHA, Fannie Mae, or Freddie Mac.
“This invisible enemy has a lot of Americans concerned about how they are going to stay safe and make ends meet,” said HUD Secretary Ben Carson. “No one should lose their home because of Coronavirus, and this new website is full of resources to help property owners and renters navigate these unprecedented times. HUD is continuing to monitor the needs of our FHA borrowers and HUD-assisted families, and we are prepared to take additional actions as needed.”
The coronavirus pandemic has made us all a lot more familiar with our homes. But it has also thrown up a great number of questions over the future of the property market.
While global markets were thrown into turmoil in the early days of the outbreak, the property market, broadly speaking, has remained resilient. As of April, the median U.S. house price rose 8% year on year to hit $280,600.
That’s good news for investors. Real estate continues to rank as the top investment pick for the majority of Americans (35%), ahead of stocks and bonds (21%), savings accounts (17%) and gold (16%).
Home prices really ramped up in the first quarter of 2020 as inventory failed to make significant gains. The National Association of Realtors® (NAR) said the median single-family home in the quarter sold at $274,600, a 7.7 percent annual increase. Prices rose in 96 percent of the 181 metropolitan areas tracked NAR. In the fourth quarter of 2019, 94 percent posted gains.
Black Knight reports that, as of May 7, there were 4.1 million loans in forbearance, up from 3.8 million in the company’s last report which covered plans put into effect by mortgage servicers through April 30. The new total represents 7.3 percent of all active mortgages and accounts for $890 billion of unpaid mortgage principal.
Both had paused due to uncertainty caused by the COVID-19 pandemic
Last month, Oregon residential renters came the closest of any state to making monthly payments at their pre-pandemic pace, according to data from RealPage, a large property management software company. Eighty-two percent of Oregon units made a rent payment within the first week of April, down 7 percentage points from the year before. (The company doesn’t track whether this was a full or partial payment.)
No other state had a smaller decline.
One of the most popular state parks in Central Oregon will be reopening as the Oregon Parks and Recreation Department continues to slowly reopen more state parks on a daily basis.
The department has now reopened at least 45 state parks with limited day-use access as of Monday. More parks will also slowly begin to reopen with limited day use throughout the following weeks if they meet OPRD’s requirements of community readiness, staff readiness, and are able to manage the park and protect the public health of visitors.
Analysis from GlobalData said a possible rise in delinquency rates from consumers who lost their jobs, less demand for homebuying, and tighter mortgage restrictions could lead to the U.S. mortgage market shrinking in 2020.
The data analytics company forecasts a reduction in mortgage balance of 0.9% for the remainder of the year, compared to the previous 3%.
“We expect to see approvals for loans tightening across the board, as banks’ liquidity will become stretched. Similarly, consumers will be increasingly wary about taking on extra liabilities due to the increased economic uncertainty,” Resham Karira, Retail Banking Analyst at GlobalData said.
Zillow analysis shows that new listings for high-priced homes dropped the fastest once COVID-19 impacted the market, with affordable listings being less affected.
The report found expensive homes—ones that make up the top-fifth of the market—saw listings fall 51.4% year-over-year by April. Listings for the most-affordable homes, which typically see the tightest inventory, fell 32.1% annually.
“From a killer whale’s perspective, not having fast-moving boats around like recreational boats … that might be quite beneficial,” said oceanographer Scott Veirs of Seattle, who coordinates an underwater microphone network called Orcasound.
The coronavirus-induced lull in marine traffic may be short-lived, meaning researchers have to act fast to document if the quieter seas make happier, healthier whales.
Thanks for reading, and be well.