What is happening in the world this month? This is unprecedented for everyone and everything. Because of the pandemic, we’re taking a “time out” for a while. Obviously in the name of health and safety, we’re self-isolating these days, businesses are closed down, people are out of work, the economy is sinking quick. As with most businesses, the mortgage business is also experiencing unprecedented challenges.
First and foremost, we’re having to determine how to exist and how we can even take a “Time Out.” What are we supposed to do with loans that are in escrow, or folks who were qualified a few weeks ago and now have to re-qualify because they were non-QM, or laid off? What are we to do about locking in rates, when they can’t be locked in? It’s a trying time during this “Time Out.”
Additionally, we are watching the relief programs for small businesses from the government that may provide forgiveness loans to meet payroll, instead of laying workers off. It’s a troubling time.
So what direction should you be following in the event that you have fallen out of your purchase, or you are looking to refinance your home to take out much needed cash as this time. My recommendation is to seek out a lender that is a bank, backed by the government loan programs available to lenders from Freddie Mac and Fannie Mae. In the mortgage lending business, some small lenders are leveraged, hedging their investment against the market. If you’ve been following the stock market these days you may be wary of the up and downs, and for a leveraged lender, that may result in markers and hedges being called. Not a good situation to be in.
Adapting to the “Time Out” is all we can do. I will say that there is still plenty of opportunity available for purchasing and refinancing, just be sure to check the solid foundation of your lender.
This week, again, I am self-isolating, staying safe and doing my part to keep others safe. Be safe.