No Loan For You! Credit Market Getting Squeezed

By Jim Perksie Historically low interest rates may not benefit many would-be homebuyers as the credit market is tightening considerably during the coronavirus pandemic. Redfin announced Wednesday that its Mortgage Credit Availability Index dropped 16 percent in March and is at its lowest level in five years. The index measures how easy it is to get a home loan. “Thousands of Americans who were priced out of the housing market due to the affordability crisis of the past decade might finally see homeownership as within reach, especially given historically-low mortgage rates. But unfortunately, they are now faced with another roadblock and may not be able to get a loan,” Redfin senior economist Sheharyar Bokhari said. “Home equity is the primary way for…

MBA: 6.99% Of Mortgages In Forbearance

The number of mortgages in forbearance amid the coronavirus pandemic keeps climbing. The latest data released Monday by the Mortgage Bankers Association shows 6.99 percent of mortgage borrowers – or 3.5 million – were in forbearance as of April 19. That’s up from 5.95 percent a week earlier. On March 2, roughly 0.25 percent of loans were in forbearance. MBA’s numbers are even higher than those released Friday by Black Knight, which estimated that 6.4 percent of all mortgages were in forbearance as of April 23. “Forbearance requests fell relative to the prior week but remain roughly 100 times greater than the early March baseline,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.” While the pace of job…

FHFA: No Lump Sum On Fannie, Freddie Loans

The Federal Housing Finance Agency issued a reminder Monday that borrowers who go into forbearance will not have to repay missed payments all at once if their mortgages are backed by Fannie Mae or Freddie Mac. FHFA said the statement was issued to “combat ongoing misinformation” and urged all mortgage lenders to adopt similar policies. “During this national health emergency, no one should be worried about losing their home,” FHFA Director Mark Calabria said. “No lump sum is required at the end of a borrower’s forbearance plan for Enterprise-backed mortgages.” The $2 trillion CARES Act includes a moratorium on foreclosures and the right to forbearance. Forbearance allows borrowers with a federally backed mortgage to put off payments for at least…

Mortgage Roundup (4/27/20) – No Payments, Marketing, Urbanization

Good morning! Today is Monday, April 27. A number of states have begun to loosen coronavirus restrictions. The Naval hospital ship USNS Comfort is discharging its last coronavirus patients before leaving New York City. Some high schools are holding online proms to safely keep the tradition going amid the coronavirus.  And in mortgage and housing news … CANCEL RENT, MORTGAGE: The Rent and Mortgage Cancellation Act of 2020 would suspend all rent and mortgage payments on primary residences, regardless of the tenant’s or mortgage holder’s ability to pay or whether they had suffered any financial hardship.  FORBEARANCE RISE: The number of loans in forbearance continues to outpace regulators’ expectations.  RISK/REWARD: Paying off your mortgage early may make sense, if you can afford it.  REFINANCING DEMAND: Mortgage lenders are struggling…

6.4% Of All Mortgages Now In Forbearance

The number of loans in forbearance continues to outpace regulators’ expectations, with an estimated 3.4 million homeowners pushing pause on mortgage payments amid the coronavirus pandemic, according to data released Friday by Black Knight. According to the firm’s forbearance tracker, 6.4 percent of all mortgages have entered into forbearance as of April 23 – up from 5.5 percent a week ago. On March 2, roughly 0.25 percent of loans were in forbearance. Black Knight reports that 1.57 million Fannie and Freddie loans are in forbearance, making up 5.6 percent of their share of the mortgage market. Federal Housing Finance Agency Director Mark Calabria said early this month that he expected no more than 300,000 Fannie and Freddie loans to fall into forbearance…

GSEs To Purchase Some Loans In Forbearance

The Federal Housing Finance Agency announced Wednesday that it will allow Fannie and Freddie to purchase some single-family mortgages in forbearance in an attempt to support the liquidity of mortgage lenders during the coronavirus pandemic. FHFA took action in response to borrowers seeking mortgage forbearance shortly after closing on loans – and before the lender could deliver the loan to Fannie Mae or Freddie Mac (GSEs). Prior to Wednesday’s change, loans in forbearance were ineligible to be sold under Fannie and Freddie requirements, placing the borrower and the lender in jeopardy. “We are focused on keeping the mortgage market working for current and future homeowners during these challenging times,” FHFA Director Mark Calabria said. “Purchases of these previously ineligible loans…

Mortgage Roundup (4/22/20) – FHFA Guidance, Recovery & Home Sales

Good morning! Today is Wednesday, April 22. A 3.7 magnitude earthquake shook parts of L.A. The Senate passed a $480 billion aid package to help small businesses and hospitals to blunt the economic crisis caused by the coronavirus. Netflix has added 16 million new subscribers.   And in mortgage and housing news … FOUR-MONTH FORBEARANCE: The Federal Housing Finance Agency announced that mortgage lenders will only have to cover four months of missed payments from borrowers under forbearance during the coronavirus pandemic. Is a Fed liquidity facility next? HOME SALES: Existing home sales fell in March amid the coronavirus outbreak, though overall sales were up slightly from a year ago, the National Association of Realtors announced.  FLYING W RECOVERY: The housing market recovery is projected to look like a “flying…

FHFA: Lenders To Cover Just 4 Months Of Missed Payments

The Federal Housing Finance Agency announced Tuesday that mortgage lenders will only have to cover four months of missed payments from borrowers under forbearance during the coronavirus pandemic. The change applies to all mortgage lenders managing Freddie Mac or Fannie Mae backed loans. FHFA, which had been under intense pressure to provide relief to lenders, said that mortgage servicers with Fannie and Freddie loans will have “no further obligation to advance scheduled payments” to creditors after four loan payments have been missed. In short, the announcement means the loans in forbearance due to the coronavirus can be kept in mortgage-backed security pools as long as they are in forbearance. “The four-month servicer advance obligation limit for loans in forbearance provides…

The Calabria Files: Very, Very Wrong

Federal Housing Finance Agency Director Mark Calabria said on April 1 he expected 300,000 Fannie Mae and Freddie Mac loans – or 1 percent of their mortgages – to go into forbearance in April. Less than three weeks later, he’s way, way off. The Mortgage Bankers Association reported that 4.64 percent of Fannie and Freddie loans were in forbearance as of April 12. And an analysis by financial technology firm Black Knight found that there were nearly 1.4 million Fannie and Freddie loans in forbearance as of Friday, April 19 – representing 4.9 percent of their mortgages. Calabria made his original prediction of 300,000 on CNBC on April 1, prefacing them by saying they were very preliminary and may change: …

Mortgage Roundup (4/20/20) – Forbearance, IMBs & Recovery

Good morning! Today is Monday, April 20. Democrats and the White House are close to a deal to help small businesses hurt by the coronavirus. Shake Shack plans to return its $10 million paycheck protection loan after getting needed capital on its own. Neiman Marcus is preparing to seek bankruptcy protection this week. And in mortgage and housing news … GSE FORBEARANCE: FHFA Director Mark Calabria appears to have misjudged the number of mortgages projected to be in forbearance. INDEPENDENT MORTGAGE BANKS: The lending business was significantly more profitable for independent mortgage banks in 2019, though 2020 is going to be another story.  LUMP SUM: Realtors are advising clients that they may owe missed monthly payments in a lump sum at the end of the forbearance period. HOUSING COUNSELORS: Coronavirus…