How Serious Is The Coronavirus And Its Impact On The U.S. Economy

This ARTICLE On How Serious Is The Coronavirus And Its Impact On The U.S. Economy Was PUBLISHED On February 28th, 2020

More and more Americans are asking the question of How Serious Is The Coronavirus?

• • The first death from the widely spoken coronavirus hit yesterday in Washington State
  • The coronavirus scare has shaken the financial markets last week
  • The Dow Jones Industrial Average entered correction territory along with all other market indices
  • The Dow tumbled more than 12% in one week
  • A market correction is defined as when the market drops 10% or more
  • A Bear Market is when there is a market selloff of 20% or more
  • Will the market selloff continue into next week?
  • Can we enter a Bear Market?
  • There are conflicting stories on How Serious Is The Coronavirus
  • President Trump is accusing the Democrats and the Media of exaggerating the coronavirus threat and trying to trigger fear to Americans
  • Republicans are mixed on how they feel on how serious is the coronavirus
  • Either way, the effect of the coronavirus is yet unknown
  • One thing for sure is the Democrats are politicizing the coronavirus scare to take advantage of winning the majority in the 2020 election
  • This holds especially true in unseating President Trump with a Democrat President
  • No politician, whether Democrats and/or Republicans should politicize a potential international epidemic for their party’s benefit
  • The U.S. economy is fundamentally strong and is expected to become stronger
  • The housing market is booming with no signs of a slowdown
  • Mortgage rates are tumbling which is adding fuel to the fire on the housing market
  • However, the coronavirus scare can change all this

In this article, we will discuss and cover How Serious Is The Coronavirus And Its Impact On The U.S. Economy and how it will affect the housing markets.

How Serious Is The Coronavirus And Why Is There A Market Selloff?

The financial markets do not like uncertainty.

• • • More so, the financial markets are terrified of fear by investors
    • Whenever there are uncertainty and fear in Wall Street, investors panic and a market selloff occurs
    • The answer to How Serious Is The Coronavirus, it is extremely serious
    • Until we find How Serious Is The Coronavirus and a solution to a vaccine and/or cure, the markets will remain uncertain
    • The stock market will remain volatile and we can possibly enter a Bear Market
    • A market correction happens when there is more than a 10% drop in the market. In one week, the U.S. stock market dropped 12%
    • To add to more uncertainty, there was a woman in Washington State infected with the coronavirus who died late Friday night after the market closed
    • This was the first death recorded in the U.S. from the coronavirus
    • Some Democrat politicians like Nancy Pelosi, Chuck Schumer, Adam Schiff are using this serious international potential viral epidemic to politicize their party
    • These actions are despicable and immoral

The coronavirus scare should not be used as a political weapon to benefit one’s party over another and win the majority in Congress. This holds especially true for Democrats using fear tactics to win the 2020 Presidential Election and get President Trump out of office.

President Trump Accuses Democrats And The Media Of Politicizing The Coronavirus Scare

President Donald Trump while on a campaign rally Friday in South Carolina accused the media and the Democrats of politicizing the coronavirus. He went further and said that the “Do-Nothing Democrats” are using the coronavirus scare as their new “Hoax” and are on a major fear campaign and blaming Trump for this unknown potential worldwide epidemic that started in China.

Trump continued said the Democrats are not wasting any time in politicizing the coronavirus since the Russian Collusion hoax, Ukraine hoax, and fake impeachment is now over. The U.S. State Department urged Americans to reconsider traveling to Italy. The coronavirus has now spread to Italy. Adding to the already panic in the U.S., California reported a second case of a victim who is infected with the coronavirus.

The World Health Organization reported victims of the deadly coronavirus in 56 countries and issued a high-risk warning until further notice. The coronavirus panic forced the stock market into correction territory. The U.S. financial markets closed their worst week since the 2008 financial collapse.

Are Democrats Really Politicizing The Coronavirus Scare For Their Benefit?

There are always two sides to the story. The Trump Administration is no doubt alarmed about this unknown coronavirus and the seriousness it may affect people. However, it is obvious the Trump Administration is taking this threat very seriously. They are also trying to avoid a national panic where all economic engines shut down completely. It is obvious Democrats are trying to use the coronavirus scare as a political tool. However, how far are they willing to go? Are they that much of scumbags that they want to create panic for its political benefit? It sure seems like they are headed towards that direction.

New York Republican Representative Lee Zeldin called Chuck Schumer a joke.

How Serious Is The Coronavirus And What Does All This Mean To The Average American Family?

It is unfortunate that the media and Democrats like Nancy Pelosi, Chuck Schumer, Adam Schiff need to politicize the coronavirus scare into trying to create fear and panic to Americans for their political benefit. As it stands today, there is no definite answer to how the coronavirus will last. There is no answer when the stock market will hit bottom. There is no set definite answer on how the economy will suffer. One thing to keep in mind is that America’s health team is the best in the world. The Trump Administration seems like they have everything under control and are ready for any potential bad news. The economy is still strong fundamentally. The housing market looks stronger than ever. Mortgage rates are tumbling due to the coronavirus scare. This is at least a benefit for mortgage borrowers. No doubt, mortgage borrowers will be seeing mortgage rates plummeting in the coming days and week. This is a developing story. Gustan Cho Associates Mortgage News will keep our viewers updated in the days and weeks to come on this story.

It is important to understand where the housing market is today and where the housing market may go in the near future.

• The COVID-19 coronavirus outbreak has put a ripple in nearly every industry across the world
• The United States housing market is no exception
• In this blog, we will detail my thoughts and opinions on the COVID-19 outbreak and how it will affect mortgage lending

In this article, we will discuss and cover The Economic And Housing Impact Of The Coronavirus Pandemic.

The Economic And Housing Impact Of The Coronavirus Pandemic On Americans

From the White House coronavirus task force briefing from Sunday, March 29, 2020.

• Dr. Fauci estimates up to 1 million Americans can be infected with COVID-19
• He also added that the virus could cause more than 100,000 to 200,000 deaths but is incredibly hard to predict because the virus is a “moving target”
• Meaning, this can get at least eight times worse than it is today
• We all need to come together and do our part as Americans to keep each other healthy
• From the numbers reported, the virus that originated in China now has more than 732,000 people affected worldwide with about 143,000 of those being in the United States
• This information is according to the John Hopkins University database
• Already we have lost over 2,000 lives in the United States
• Dr. Fauci Stated that we lost over 60,000 people during the annual flu season of 2017 and COVID-19 coronavirus is clearly worse than the common flu season

Nobody wants to see these numbers, but it would not come as a surprise to experts if the death toll gets that high. It is a dark reality to face.

The Economic And Housing Impact Of The Coronavirus Pandemic And Will The Country Recover?

It is no secret that our economy is hurting in a way like never felt before. President Donald Trump announced the continuation of social distancing guidelines through April 30, 2020.

• He has urged Americans to avoid nonessential travel and in-person gatherings of more than 10 people
• From what I am experiencing, there are very few people having gatherings of over 10 people
• The data shows us that the disease is not slowing
• Major cities throughout the country have been hit incredibly hard including New York and New Orleans
• At this time, the virus has not shown signs of leveling off
• There is no exact way to know when the virus will reach its peak
• We hope this happens soon so we can start getting our economy and lives back to normal
• Dr. Fauci also cautioned us that areas with low numbers of infections are not 100% safe
• This virus can spread quickly, and vulnerable areas need to be ready for testing

At this time, it makes sense to pour our resources into heavily affected areas, but keep in mind how quickly this can spread.

Toll On Americans From The Economic Shut Down

In tough times like these, it can be difficult to separate facts from emotions.

• When I watch the news, it is very negative and doom and gloom
• The amount of harm already done to our economy is astronomical
• Many experts say even with the $2 trillion stimulus package put in place by Congress, the economic downfall will take at least 7 to 10 years to recover from
• That is an incredibly long time
• It took about that long to recover from the real estate crash of 2008
• The COVID-19 coronavirus outbreak seems to have a more devastating financial outcome
• This is the first time in the history of the United States where our citizens are asked not to work
• If you’re going to ask millions of people to stay at home and not work, what do you do when your bills are due?

It is no secret that mortgages are always due on the first of the month, which is rapidly approaching in just two days.

Changes Coming In The Mortgage Industry Due To Coronavirus Pandemic Economic Meltdown

At this time there are plenty of rumors that some major players in the mortgage industry are ready to help the American people.

• The long-term effects this may have on the mortgage industry are very difficult to predict
• In these tough times, with thousands of Americans off work, something needs to be done
• Major players such as GINNIE MAE  are tossing the idea around of forbearance on mortgage payments
• This can put a huge disruption into the mortgage market

These effects can trickle down into other sectors of the economy such as pension funds and retirement accounts as investments in mortgage-backed securities are part of the plans.

The Economic And Housing Impact Of The Coronavirus Pandemic: Are We Going To Have A Repeat Of The 2008 Mortgage Meltdown?

At this time, mortgage industry officials say they need about 40 billion dollars in federal help over the next three months and over a hundred billion dollars over the next nine months to stay afloat.

• The industry has yet to secure any government help during this economic downfall
• Mortgage servicers were not protected in the 2.2 trillion-dollar economic rescue package
• The Federal Housing Finance Agency (FHFA) who regulates FANNIE MAE and FREDDIE MAC are preparing for many non-bank mortgage servicers to fail

The longer this goes on the higher the probability that Fannie Mae and Freddie Mac will need to add delinquent mortgages to their balance sheets.

The White House Task Force Battling The Coronavirus Impact On Jobs And The US Economy

My takeaways from the Coronavirus White House Task Force:

• Unemployment numbers:6.6 million Americans filed unemployment last week and over 10 million in just the past two weeks
• That number is something that has not been seen before and far surpassed the estimated numbers
• The CARE ACT has extended unemployment benefits to include self-employed individuals and freelancers
• It even extends state benefits by a full 13 weeks
• Offering an additional $600 per week on top of the state unemployment benefits
• It will also expand eligible time frames to collect unemployment
• Adding freelance workers to the unemployment bill is very difficult
• Their income is quite variable and hard to prove
• For freelancers, contractors, and GIG workers, they are asked to send in check stubs, bank statements, and work orders to verify income for unemployment benefits

I was happy to see these individuals included in the relief package.

Major Health Crisis And Medical Supply Shortage

Masks and other PPE‘s:

• It is a rare appearance at the task force briefings
• Jared Kushner made an announcement that a large shipment of supplies is headed to New York City, the nation’s epicenter for the outbreak
• Mike Pence stated over 200,000 additional masks would be sent to New York to help control this hotspot

3M issues:

• In a tweet late last night, President Donald Trump stated 3M will have a “big price to pay” over mask production
• Seems like the White House invoked the Defense Production Act (DPA) to acquire more masks with N95 respirators made by 3M
• This message is from the Federal Emergency Management Agency
• 3M states they will work closely with the administration to maximize the number of respirators they produce on behalf of the U.S. healthcare workers as part of the DPA order
• 3M also has concerns because the White House requested a cease export to Canada and Latin America

3M stated this may cause significant “humanitarian implications” as they are a key supplier throughout the world.

Coronavirus Impact On Jobs And Health

Sometimes it helps to put things in perspective.

• A judge in Kentucky has allowed ankle monitors for those who have tested positive with COVID-19 coronavirus
• This is because they were seen outside of their self-quarantine mandate
• These monitors will help alert authorities if they leave their homes

This may sound extreme, but in areas like the Philippines, they are threatening to shoot citizens who do not obey the self-quarantine laws.

Coronavirus Impact On Jobs And Mortgage Industry

With so much uncertainty in the mortgage markets, we are seeing panic throughout the industry.

• As of late, we have not had any reassurance that NON-QM mortgage lending will be coming back anytime soon
• Those companies are bracing for servicing issues due to millions of Americans being off work
• As mentioned above, a record number of Americans have filed for unemployment last week alone
• This is going to make payments difficult for struggling Americans
• Yes, the stimulus checks are on the way, but $1200 per person doesn’t go very far, especially in areas like New York City and San Francisco
• Not to mention those who have made more than $75,000 are getting a smaller stimulus check
• Anybody who made over $100,000, will not receive any money from the stimulus package
• Those individuals still have bills from a lifestyle they were able to afford while working
• Treasury Secretary Steven Mnuchin stated stimulus checks should be sent in the next two weeks
• If you have not set up a direct deposit, a portal will be set up where you can let the government know where to send your stimulus check

This is an unfortunate time for everybody no matter what socioeconomic class they are in.

Mortgage Process During The Coronavirus Pandemic And Economic Crisis

Gustan Cho Associates are still working around the clock to help our current borrowers and future clients obtain mortgage loans.

• As of today, we still have a few outlets who have not added additional LENDER OVERLAYS to their mortgage products
• We are able to manually underwrite FHA and VA mortgages, close chapter 13 bankruptcy mortgages, cash-out refinance loans, and still offer renovation loan products in these tough times

Please call (800) 900-8569 for more details.

Mortgage Process At Gustan Cho Associates During The Coronavirus Crisis

How our team is helping fight the coronavirus outbreak.

• The entire staff of Gustan Cho Associates is still working remotely
• Our team is starting to get used to working from the home process
• There is a learning curve of not being in the office
• We also have set up daily email reminders for our employees to wash their hands as consistently as possible, for 20 seconds at a time with soap and warm water
• We are practicing social distancing as most of us live in states that are under “shelter in place” rule
• Above and beyond we encourage our clients to be patient with the parties involved in their mortgage transaction
• It may be harder for a realtor to obtain access to a property to view

Little things like this can cause slight delays in the homebuying process. But we all must be patient and come together to fight this invisible killer.