Motto Minute with Debbie Cross-Lile
As I watch the financial markets bounce around daily over the last couple of weeks, I can testify to never ever witnessing anything like it. To say that we are in uncharted territory is a huge understatement.
As a lifer Mortgage Professional with over 15 years in the business doing every kind of mortgage possible; I am thinking that if I am confused and befuddled my co-workers in our local Real Estate market must be triple stressed over our immediate financial future. So here I am endeavoring to give some light to the end of the tunnel. Along with my own views likes and comments.
A little history of Mortgage lending. Typically the stock market and the bond market perform opposite each other. Meaning; when the stock market gets hit, the bond market has great home interest rates. The bond market (more so ) and the feds (less so), determine the housing interest rates in America. The last week fed reduction was not attached to our housing market rates. It was for banks borrowing from banks, business loans and consumer loans for cars, boats and home equity lines of credit. If you have one of these it may be a good idea to check your rates.
As the stock market got crunched 1200 points, 1900 points and 1000 points all within a week, Mortgage Professionals are thinking “Holy Cow here comes another refinance craze”, maybe even down in the TWO’S !!! It’s not happening. In fact America’s mortgage lenders have gone in the exact opposite direction and have increased interest rates- a lot.
So I get on the phone with every lender I can trying to get this funky rationale explained. Pulling back the throttle, slowing things down, waiting and watching what happens in the secondary mortgage market is the community buzz. Seven days later the new and highly profitable Sub-prime or Non-QM market suspends lending. Other large lenders and players in our marketplace suspend all jumbo mortgages. “Suspends”, is the important word here. Everyone, but everyone, is planning a full recovery. But, currently there are no bank statements, asset depletion or anything out of the ordinary VA, FHA and Conventional loans available. Many of those lenders-the A paper guys- have stopped taking files for the immediate future as well. Don’t be surprised if you hear of some big names closing shop.
The final scoop is April. We have to get through April and May, if we are expected to be back in the game. When we come back it will be gangbusters. The big guys will be geared up with staff to massively produce. And, the little guys -and sub prime guys-will come back a little slower, but back in the game nonetheless. The stimulus will put a ton of money in the mortgage and housing market. There will be forgiveness programs in place for everything from damaged credit, to delinquent Mortgage payments. Interest rates will have to be decent in order to get housing and economy going too. We have to get through April.
All of the social media sites and public service announcements are indicators of this. When you are repeatedly told to self quarantine and social distance yourself, it is not just because of damage to loved ones and co-workers. It is critical to the bounce back of our financial health as a nation. Minimize the virus impact on local citizens, which will affect local businesses returning to full workforce. This effects the local economies. The local economies first and then national economy. Then globally. This part is the big pain in the butt part, but it is also the part that will put us back to work faster or slower. Slower will be harder for sure. Let’s not do slower.So that’s it for today. I will keep my blog going to keep our Remax family in the know with our local lending market. Hang in there, I’ll keep watch and keep you posted.
Find this blog post and more on my website. Next up: Getting your buyers ready to go while self-quarantining.
I’m Debbie Cross-Lile and I’ve been in the lending business for nearly 20 years. Helping people achieve the purchase of a new home is my passion. Please feel free to contact me with any questions you may have as we navigate these new waters.
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