BREAKING NEWS: Mortgage Denial Due To Coronavirus Pandemic Crisis Chaos
As the United States and global population deal with this pandemic, many pillars of industry have been
affected.
- The mortgage market is heavily affected due to this pandemic
- There are many unfortunate outcomes of this COVID-19 outbreak including millions of Americans out of work
- Since they are out of her, they may not be able to qualify for a mortgage
- In this blog, we both detail reasons people are losing their mortgage approvals due to the COVID-19 coronavirus outbreak
- We will also give a few industry updates
In this article, we will discuss and cover borrowers getting Mortgage Denial Due To Coronavirus Pandemic Crisis Chaos.
Mortgage Denial Due To Coronavirus Pandemic: COVID-19 Updates
COVID-19 updates:
- On April 16th, 2020, the White House coronavirus test for a sit-down state would be up to individual states on when they plan to reopen
- A multiple phases reopening of our economy is set to start in the near future
- As of yesterday, over 3.5 million coronavirus tests have been completed in the United States
- That number is expected to exceed five million by the end of the month
Through the gatekeeping plan and expanded testing, we expect to see areas of our country opening soon. This is good news for the overall economy.
Coronavirus Impact On The Mortgage Industry
During this global pandemic, we have seen some dramatic changes throughout the mortgage industry.
- From the complete removal of NON-QM mortgage loans all the way to updated interest rate lock policies
- These changes can throw a major ripple in the mortgage process
- During times like this, we must all come together to help do our part to keep the process as normal as possible
- We have also seen most investors raise credit score requirements
- Most FHA lenders used to go down to 620 (some down to 580) credit score with a 3.5% down payment, now many of them are as high as 660 in regards to credit score requirements
- This is due to the COVID-19 coronavirus outbreak in the uncertainty throughout the global economies
Mortgage lenders are still trying to adapt to the market and hedge any future losses.
Main Reasons For Mortgage Denial Due To Coronavirus Pandemic Economic Crisis
Reasons why people are getting denied for mortgage loans due to the coronavirus COVID-19:
- The main reason for COVID-19 mortgage denials during these tough times has to do with employment
- A staggering number of Americans are not able to work due to the COVID-19 coronavirus outbreak
- This is the first time in history the American people are encouraged to stay home and not work
- This invisible killer is something we have not seen in the past
It has completely uprooted numerous industries such as the food industry, hospitality industry, transportation industry, airline industry, and even the auto industry.
Unemployment And Economic Concerns By Homebuyers
Many sectors of our economy are not able to work at all.
- Over 22 million Americans have filed for unemployment benefits since the outbreak started
- Other sectors such as healthcare, transportation, and other essential businesses are still able to operate
- If you are able to work your normal work schedule, you should not have any issues obtaining homeownership
- Employment is a major factor in your mortgage qualifications and if you are currently unemployed, this can be an issue to purchase or refinance a property
The next issue thousands of Americans are running into the raised credit score requirements.
Mortgage Denial Due To Coronavirus Pandemic Mainly Due To The Secondary Mortgage Bond Market
As mentioned above, most of our investors have raised their minimum credit score requirements on FHA, VA, and conventional mortgage products.
- We still have outlets without any additional LENDER OVERLAYS
- Gustan Cho Associates is able to lend all the way down to 500 credit scores with FHA
- Gustan Cho Associates have not implemented a minimum credit score requirement on VA mortgage products
- This sets us apart from our competition, so if you’ve been turned down by your current lender, please give us a call
- Please call Mike Gracz on (800) 900-8569 or send an email to gcho@gustancho.com to start the process
- Even before the COVID-19 coronavirus outbreak, 75% of our clients were turned down by their current lender
- Since this outbreak, we have seen an increase in clients reaching out who have been denied by their current lender due to raised credit score, debt to income, and manual underwriting restrictions
Qualifying for a mortgage is hard enough without the added restrictions. If your current lender has added
underwriting requirements, we encourage you to reach out to the Gustan Cho Associates.
For any mortgage questions, please give us a call. We are available seven days a week. Please call Mike
Gracz on (800) 900-8569. During these tough times, we are doing our best to assist clients as quickly as
possible. We are operating at full capacity without additional lender requirements. We look forward to
hearing from you!
