BREAKING NEWS: Home Buying Process During The Coronavirus Pandemic Crisis
As Americans received some puzzling news from the White House coronavirus task force briefing yesterday on March 31, 2020, we all must prepare for things to get worse before they get better.
- By the graphs and model charts presented, we are in for a dark two weeks (maybe longer)
- Let’s hope that the two-week period does not get extended
- Americans must brace themselves to see our death toll continue to rise before we are able to flatten the curve
- We already know the social distancing guidelines have been extended through the end of April, but will that be enough?
- It is no secret that COVID-19 coronavirus is disrupting every aspect of the global economy and hitting the United States economy in a devastating way
- A key pillar in our economy is the real estate sector
- The real estate sector is taking a beating from this virus
- In this blog, we will detail some hiccups we have seen in the home buying process due to the COVID-19 coronavirus outbreak
In this breaking news article, we will discuss and cover the Home Buying Process During The Coronavirus Pandemic Crisis.
Home Buying Process During The Coronavirus Pandemic Crisis Throughout The United State
MY TAKEAWAYS FROM 3/31/2020 Task Force Update:
- As we hear from the WHITE HOUSE and CDC, we are now bracing for the death toll to skyrocket
- We are going to have a very tough two weeks. We are trying to get through this and see the light at the end of the tunnel
- The death toll is predicted to shoot up for the next few weeks before we flatten the curve. Not easy news to hear
- According to Dr. Fauci, we are still seeing a rise in new cases
- Until there is a reduction in new cases, we will not see a reduction in hospitalizations or deaths
- Social distancing will need to continue to help stop the spread of COVID-19 Coronavirus
- The COVID-19 Stimulus package included nearly $350,000 billion in small business loans for payroll and other expenses
- The stimulus package is still confusing to me
My hopes are that the American people can get to work sooner than later.
The US Economy During The Coronavirus Outbreak
President Trump talked to companies such as AT&T, Comcast, T-Mobile, Sprint and others to catch up on the condition of the internet infrastructure. So far, all Americans have been able to stay online, which is huge. Not just for entertainment purposes but also for the global economy. Many Industries are still able to work from home. Staying connected during a time like this is important. I have used ZOOM and FaceTime more and more during the shelter in place. It is good to connect with loved ones. Especially those who may be in a compromised group.
Disruptions In The Mortgage Process During The Coronavirus Pandemic
Disruptions in the mortgage process due to COVID-19 Coronavirus:
- Gustan Cho Associates are starting to experience a disruption in our mortgage process
- When completing a home loan, there are a lot of moving parts that must be completed
- Most of these processes go on behind the scenes and clients are not aware of these tasks
- Yesterday we received an alert that verification of employment service called THE WORK NUMBER is experiencing heavy traffic and delays
- We are no longer able to complete verifications of employment unless we have an e-Signed mortgage application with a notice of intent to proceed disclosure returned to us
- This is bad news because individuals with variable income must have a verification of employment completed to accurately calculate income
- For example, if you receive a commission as well as a salary, we need to clearly document the past 24 months of your commission income to calculate how much will count towards your debt to income ratio
Not being able to use the work number is a major blow in the prequalification process.
Mortgage Processing And Underwriting Process During The Coronavirus Pandemic
- What about loans already in processing/underwriting?For loans that are further along in the pipeline and may have been submitted before the COVID-19 coronavirus outbreak, we are still seeing some disruptions
- For example, many appraisers are not taking new assignments because they are uncomfortable entering a stranger’s home
- Yes, Fannie Mae has recently loosened the appraisal requirements for a home loan, but other agencies such as FHA and VA have not
- This can be an issue, considering an appraisal is a key part of the mortgage process
- The appraisal process is one of the longest steps in the home loan process
- We have also seen the appraisers who are working add a surcharge to their services, costing our borrowers more upfront money. In times like this, money is tough
Please see our APPRAISAL UPDATE BLOG.
Economic Impact In The Mortgage Industry
Today is April 1, 2020, when millions of American’s mortgage payment is due. Yes, there is a 15 day grace period before you are charged a fine, but today is the actual due date. As mortgage servicers do not receive payment, and Americans fall behind on their home loans, you are going to see a ripple effect in the mortgage industry. It is no secret that many mortgage companies will go out of business due to the coronavirus outbreak. Most mortgage companies have increased their LENDER OVERLAYS to make their loans less risky! These overlays seemed to flood in overnight last week and really put borrowers in a bad spot.
Home Buying Process During The Coronavirus Pandemic Crisis And Mortgage Crisis
I have talked to a few friends in the industry who have raised their minimum credit score requirements from 600 all the way to 660 for FHA mortgages. That is scary because clients who have had a loan in the works, who’s interest rate was not locked in, are now being told that they cannot complete a mortgage loan. According to the automated underwriting system, this is allowed by number 10. A lender reserves the right to create their own set of overlays. Any good news out of this?
Gustan Cho Associates Approves Government Loans With Under 620 Credit Scores
Throughout my adult years, I have always tried to find the positives in a bad situation.
- As of today, Gustan Cho Associates are still able to complete mortgage loans without lender overlays
- We are one of the few remaining, and we will do everything we can to help you and your family purchase or refinance the property
- I have seen an addendum added to certain sales contracts for any COVID-19 coronavirus related delays
- This will help protect you, the buyer, from your earnest money being taken if any reason the loan doesn’t close because of coronavirus COVID-19
As you know, we will continue to bring our readers up to date on any coronavirus news as well as any mortgage guideline changes. The next few months are going to be tough on everybody throughout the world, and the mortgage industry is no exception. Please keep an eye on our YouTube CHANNEL and check our website frequently as we are receiving mortgage news on a daily basis. I will continue to share my experiences with our readers.
Qualifying For A Mortgage During The Coronavirus Pandemic With A Lender With No Overlays
Remember, even before this outbreak, 75% of our clients have been turned down by the current lender or not getting the customer service they deserve. If you have been turned down due to an added overlay, please give Mike Gracz a call on 630-659-7644. You can also reach Mike Gracz at email@example.com. The team at Gustan Cho Associates is working remotely so we are available seven days a week. Feel free to call day or night, we are here
April 1, 2020 - 5 min read