April 24, 2020. By Kevin Donohue:
Fairway Mortgage recently hosted a webinar regarding the current state of the mortgage industry and what their business is doing to maintain business operations during these trying times. The webinar was hosted by Senior Vice President Amy Slotnick, who has over 30 years of experience in the industry. Below are a few key takeaways from Amy’s webinar:
- There is a major distinction between the economic crisis in 2008 and the market we are in now. The distinction is that the crisis in 2008 was led by the housing market bubble bursting, bad mortgage loans that had defaulted, et cetera. This time around the housing market is very strong; before all of this we were moving into a year of potentially record-breaking housing numbers. The spring and fall markets will be affected due to job and income loss, but as the market turns and we come out of this the housing market should remain strong.
- When the Federal Government implemented the emergency rate cut, many people believed the mortgage rates were also being cut, but this was not the case. The Federal Fund Rate is the rate at which banks borrow from each other for the lending of overnight money. This does not affect the mortgage rate in a direct basis. Instead we saw the mortgage rates rise due to this, because of people moving to cash positions. Amy believes that the mortgage rates will begin to fall as we come out of this and markets begin to rise again.
- If you are in the midst of buying or selling your house there have been a couple temporary changes to the appraisal process: For single family homes and condos, buyers and sellers can take advantage of a desktop or drive by appraisal to comply with the social distancing. Appraisers will use MLS data to value a home. If there have been interior upgrades or improvements to your home, make sure to contact your real estate agent to ensure your MLS data is up to date.
- Another challenge with the current home buying process is that the buyer is required to verify that they are employed. With many companies working remote and human resource departments and managers becoming increasingly more difficult to reach, a temporary solution has been put in place. Buyers can now provide the most recent paystub as proof that they are gainfully employed. Amy suggests that if you are in the process of purchasing a home, try to acquire cell phone numbers of your direct manager for mortgage lenders to contact.
- Finally, there has been a rumor going around that with mortgage rates moving up and down so frequently that some lenders have stopped taking new purchases to focus on refinances. Amy wanted to let everyone know that this is completely untrue for Fairway Mortgage and new purchases remain their top priority.
While the housing market landscape is changing along with the volatility of the markets and crisis response, it is helpful to ask more questions than less if you are going through the home purchase or sale process; however, it does not necessarily mean that your process needs to come to a halt. Many realtors, brokers, and attorneys are using advanced digital capabilities for showings, applications, and closings. Of course, your comfort and safety are always a priority, and these should be discussed with your team of professionals.