OpenHouse Editor’s Note on Zillow reneging on iBuying

On Thursday evening, we broke Real Estate Reporter Julia Falcon’s story about Zillow reneging on home purchase agreements because of the COVID-19 pandemic. Here are some of your reactions:

  • “There is little honor amongst thieves. Zillow is making use of this to exit a bad business that only works in booming markets.” – Realtor in Salem, Massachusetts
  • “As a Realtor, I say ‘Yippee!’ We’ll take good care of the people Zillow and others kick to the curb. The sellers will likely be better off for it.” – Realtor in Westminster, Colorado
  • “I’m not the victim of an iBuyer canceling a contract…I’m the iBuyer’s competition! If you hear from any homeowners in need of a cash offer on their home, I may be able to help.” – Real estate investor in San Diego
  • “They are going to mess up this market! It is not sustainable, none are making money and they are going to collapse with a correction in the market.” – Realtor in Atlanta
  • “Great article on Zillow. Shows the lack of their value position. No one says they should overpay, but to not buy when there will be more opportunity for iBuyers than ever shows they don’t know what they are doing. Bye-bye…” – Real estate broker in Beverly Hills, California
  • “I really appreciate your newsletter and hopefully from a professional perspective you will keep the profanity out.” – Loan originator in Foothill Ranch, California (Pardon any French, dear readers.)

We’ve heard rumors of other iBuyers reneging on purchase agreements like Zillow. If you and/or your client have been on the raw end of Zillow, OpenDoor, Offerpad, or any other iBuyer canceling a contract due to coronavirus, please let me (dsanchez@housingwire.com) or Julia Falcon (jfalcon@housingwire.com) know.

In other news, several real estate companies are reporting a spike in demand for virtual home showings, which begs the question: Do real estate agents provide an essential service?

Finally, Associate Magazine Editor Kelsey Ramirez explores how one sector of the housing economy is mostly carrying on with business as usual. This article is premium content, and can be accessed by subscribing to HW+. Readers of OpenHouse can get 50% off by using coupon code “diegointrodiscount”.

You can sign up for HousingWire’s OpenHouse newsletter at https://www.housingwire.com/newsletter/.

The post OpenHouse Editor’s Note on Zillow reneging on iBuying appeared first on HousingWire.

Mar. 27: LO, Ops jobs; broker, credit products; IRS/tax transcript, jumbo, MISMO, RON changes across the biz

While in captivity it is important to have good communication. (Early anecdotal chatter indicates that the remote workforce has signs of improved productivity!) In the Northwest, Banner Bank’s mortgage group celebrated working from home with a short YouTube video of everyone’s home office (one is in the garage – bumper to bumper every day!) Thank you to Kris van Beever who sent along these cybersecurity tips for working from home to keep communication safe. Communicating with politicians in this crisis is critical. “Rob, do politicians understand that one year’s worth of forbearance would basically put every lender who services loans out of business?” I dunno. At this point the MBA, state, and industry organizations are working overtime on making sure they know. Fronting monthly payments would be a huge amount of cash coming out of servicers to the end-investors. The Treasury has the resources, but it is a matter of how they are deployed. Much more on the Bill’s impact on our industry below.

Jobs

Carrington Mortgage Services, a national top 10 wholesale lender, is seeking mortgage underwriters for the following locations:  Anaheim & Scottsdale, AZ. If interested please send resumes to John Cervantes.

Earlier in the year, “Thrive Mortgage posted about our relationship with a Veteran-focused organization named Defenders of Freedom. Although many of us are blessed with record-breaking months, aided by incredible technology, other industries and organizations are not. Thrive is proud of our partnership with Defenders of Freedom, and we draw attention to these true heroes, their families, and their needs more than anything else. Please visit their pages and see how you might be able to also positively impact the lives of the valiant soldiers who have risked so much. Additionally, many in the industry have reached out to us seeking assistance or guidance regarding much of the technology we employ. If we can be of service to you regarding any similar request, contact us at info@thrivemortgage.com. We may be competitors, but we’re colleagues first with a common goal of moving our industry forward. Stay safe and stay healthy!”

Paul Conway of Conway & Greenwood executive search is retained by San Francisco wholesaler’s Parkside Lending for its EVP, Operations search. The EVP, Operations can work remotely and central to western time zones are preferred.

FirstClose has tapped Joe Dahleen as the company’s SVP of strategy and sales responsible for working with the company’s enterprise sales and product development.

Lender services and products

 

An Exciting New Partnership for Volly & FundingShield. Volly’s new integration partnership with FundingShield will allow lenders to utilize FundingShield’s wire fraud and settlement risk management technology through the Volly POS. This exciting integration will give lenders and borrowers alike a more secure loan closing experience. Click here to schedule a demo.

With refinances at record highs, chances are your team is under immense pressure to keep your pipeline moving during the COVID-19 crisis. And with social distancing guidelines at top of mind, it’s important to keep your borrowers safe, while obtaining the equity lending appraisal data you need. Don’t miss Data Facts’ next webinar: COVID-19, Interior Appraisal Inspections, and Possible Alternatives on Wednesday April 1stat 10:00 CST, where we’ll discuss alternatives to traditional interior appraisal inspections that are suitable for the current state of affairs. You can register here.

COVID-19 may force more branch office teams to start working from home as a general practice. Unprepared teams will struggle to service high demand for refis and new loans. LOs and processors are at risk of becoming less productive and unable to capitalize on the boom. How can branch offices meet demand if they must work from home? This case study may provide an answer and the results are impressive. The case study profiles Equity Mortgage Group, a division of American Pacific Mortgage. EMG’s team generally works remotely. But, after moving to a simple process management platform, TeamworkIQ, they became far more productive doing so. “We scaled up production and revenues by 280% in 10 days with $0 added headcount,” said Charlie Christensen, Branch Manager and Sr. Loan Officer. TeamworkIQ is easy to set up, simple, very affordable, online process management for teams. View the case study here.

The Association of Independent Mortgage Experts is extending the submission deadline for the inaugural AIME Broker Rankings to March 31. The rankings are the first in the industry to feature lists based on data from independent mortgage brokerages and loan originators who are working solely in the wholesale channel. AIME Broker Rankings will recognize the top-producing, fastest-growing and most accomplished independent mortgage brokers and brokerages. Those that qualify and are confirmed as part of the final AIME Broker Rankings will receive a digital recognition badge that individuals can use on their websites and social media. The AIME Broker Rankings are part of AIME’s commitment to increasing the visibility of the independent mortgage broker community by highlighting the achievements of the men and women working in their own communities to bring the best mortgage options to their clients. Click here for more information about the rankings.

“During this time of great uncertainty, some lenders are experiencing record-setting business while others are seeing a drop off. Both are challenges that can be hard to manage, even in a normal environment. But with the COVID-19 pandemic, there’s greater anxiety and even more obstacles to overcome. Credit Plus appreciates your business and is here to assist you during this unprecedented time. We’re committed to helping you by offering time-saving tips, additional training and personalized solutions to meet your unique concerns. Consider Credit Plus your dependable verifications partner and know you can reach out to us for assistance whenever the need arises. Just contact info@creditplus.com (800.258.3488). We are confident that by working together, we’ll get through this tough time and emerge stronger than ever.”

QLMS continues its explosive growth. And the mortgage community has noticed. QLMS just reached another major milestone. As of March 25th, 7,000 mortgage brokers, regional banks and credit unions have chosen to partner with QLMS. It took 7 years for QLMS to reach 1,000 partners. It took another 2 years to get to 2,000 partners. But it only took 18 months to add 5,000 additional partners to get to 7,000. The mortgage community interest in QLMS is overwhelming. In fact, it took just a mere 100 days to go from 6,000 to 7,000 partners! In turbulent times, mortgage professionals are seeking the strength and reliability QLMS provides. To learn more about the value recognized by 7,000 of the very best mortgage companies, click here and become Stronger Together with QLMS.

While we all are dealing with this virus situation, Caliber Home Loans, Inc. continues to help customers to the best of our capacity. “We’re officially in Spring and that means customers need to purchase homes. While showings may be more virtual in nature right now, the reality of Open Houses and closing selfies will be here before we know it! Caliber stands ready to deliver the American Dream in all seasons with marketing resources in CaliberPRO, Regional Operations Centers that know your area, and seasoned Account Executives that get deals done. Plan for purchase success with your Caliber Account Executive today. If you’re not yet approved with Caliber Wholesale, contact Tony Kottenbrock.”

Corona-driven changes

In its just released March Insights Report, STRATMOR Group examines several areas affecting lenders as rates drop and coronavirus infections rise. In “Pipelines and Pandemic: Managing Through the Virus-Driven Storm,” STRATMOR offers insight into Capital Markets, MSRs, remote work, outsourcing and the customer experience. In a second article in this issue, “COVID-19 and the Customer Experience,” STRATMOR MortgageSAT Director Mike Seminari offers lenders four ideas to help sustain communications with borrowers during these uncertain times. Check out the March Insights Report.

National MI rolled out its response to Freddie and Fannie’s changes earlier this week.

AmeriHome sent out, “Effective for new locks taken on and after Friday, April 3, 2020, the minimum decision credit score for all government loans will be the greater of the program guide requirement or 640.” (As perspective, Wells Fargo’s is 680.)

The IRS has been busy. “The IRS is temporarily suspending acceptance of new IVES work at this time as we adjust to the impact of state and local shelter in place orders. We will keep all participants posted. We appreciate your patience as we navigate through numerous different challenges in this very rapidly changing environment.” Sandra James with 4506-Transcripts.com checked in with her thoughts. “This is definitely an unprecedented time we are all experiencing and things are changing fast! The IRS told us this morning that they were at 4-9-day turnaround time due to staff shortages and closed offices. At noon we received the IVES suspension notice. But we are continuing to help lenders, so they should not hesitate to reach out to us as we are still able to complete manual VOE’s quickly!”

Lenders and investors acted swiftly. For example, “Effective immediately, PennyMac is temporarily suspending the PennyMac requirement for tax transcripts. Note that USDA transactions require tax transcripts. Correspondents remain responsible for complying with all USDA requirements. An announcement will be released when the tax transcript requirement is reinstated. Please note that PennyMac will continue to require signed 4506-T according to current guidelines.”

From Bedford Andy Cadorette, Senior Manager, Business Development, informed me that New Hampshire Housing is open for business and once again taking loan reservations.

Wells Fargo Funding “remains committed to purchasing your Non-Conforming Loans. However, due to unprecedented market conditions, we’re making the changes outlined below, effective with Registrations, Locks, relocks, and renegotiations on and after March 27, 2020, to help ensure the long-term viability of our Non-Conforming program. Ineligible transactions

The following transactions will be ineligible under our Non-Conforming program: Cash-out refinances, Investment properties, LTV/CLTVs >80%. We’re worsening FICO/LTV adjusters for Non-Conforming Loans.”

With Wells Fargo’s retail group eliminating the requirement for interior photos for existing construction (still required for new construction), the industry is reacting. For example, Kim Perotti, co-president of AXIS AMC, sent, “At AXIS, we are focusing on training and support for our appraisers as we begin ordering Desktops and Exteriors. Although appraisers are using the same forms to complete these assignments, they are developing their opinion of values without the benefit of the data they typically gather when inspecting the interior of the home. Now, they need to expand data sources to still complete every field on the form and as a result, data collection and analysis has new challenges as well as new opportunities. AXIS is here to help them rise to that challenge.”

TD Bank Correspondent Lending will auto-extend all commitments retroactive to 3/15/20 for 30 days, without cost, from the current expiration date. Any extensions previously made to loans that fall under these parameters will be provided a rebate back for extension fees incurred. These free extensions will be completed in the system by 3/31/20. Additionally, TD Bank Correspondent Lending will provide automatic extensions for 30 days, without cost, for new purchase money locks through locks received 4/30/2020. (*Note: Loans must be locked with TD Bank through the closing and funding dates. This includes the three (3) day right of rescission required on refinance transactions.)

All eyes are on the House of Representatives voting on the corona stimulus bill, probably today. The MBA sent out, “As it relates to mortgage forbearance, the most important language in the bill is on pages 567-570 (single-family) and 570-574 (commercial/multifamily). $454 billion for loans, loan guarantees, and investments in programs or facilities established by the Federal Reserve for the purposes of providing liquidity to the financial system that supports lending to eligible businesses, states, or municipalities. This funding would enable Treasury and the Fed to establish a liquidity facility for loan servicers to access for advancing payments, and we continue to press hard on all fronts for a speedy announcement of such a facility.

“Consumer Right to Request Forbearance: Applies to federally backed mortgage loans (Fannie/Freddie/FHA/VA/USDA) for those directly or indirectly impacted by the COVID-19 virus (if the borrower requests and affirms hardship). No signature or documentation is required, and the initial period is up to 180 days initially, with the option to extend for up to an additional 180 days. This broadly mimics the programs Fannie Mae and Freddie Mac have already announced.

“Moratorium on Evictions: For 120 days after date of enactment, applies to single-family and multifamily properties that participate in federal housing, homelessness, rural programs, or properties financed by federally insured, guaranteed, supplemented, or assisted mortgages, including mortgages purchased or securitized by the GSEs.

“Small-Business Assistance: $349 billion for SBA loans to help small businesses make payroll and pay rent and mortgage payments, with loans of up to $10 million. Proceeds may be used for payroll, rent, payment of mortgage interest (not principal), and utilities.”

RON

Every lender knows that mortgage closings are at risk as coronavirus shutters title and recording offices. State, county and local governments have shut down or are limiting the number of people who may enter their offices, including property recording centers. Currently, nearly 2,100 counties provide some electronic access to their property records, but about a third of the jurisdictions still don’t have the ability to accept digital documents. Sens. Kevin Cramer and Mark Warner introduced Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020.

MISMO introduced the Digital Mortgage Resource Center web page to provide information on digital mortgage resources. The first posting includes a list of Remote Online Notarization (RON) Providers. If you believe your organization should be included on the list below, please contact MISMO at info@mismo.org. Included are Digital Delivery, Inc., DocMagic, DocuTech, DocVerify, eNotaryLog, Notarize, NotaryCam, Nexsys, Pavaso, SafeDocs, Signix, and SimplySecureSign.

Harry Gardner, EVP of eStrategies at Docutech and chair of the Electronic Signature and Records Association (ESRA), shot over a note. “On March 20 Sens. Kevin Cramer, R-N.D., and Mark Warner, D-Va., introduced the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020. It permits immediate nationwide use of Remote Online Notarization (RON), a type of electronic notarization where the notary and signer are in different physical locations. The Act builds on the traditional interstate recognition of notarial acts on paper and expands that to remote online notarial acts.

“The primary benefit is that, if passed, the bill would allow nationwide use of RON immediately (with a set of minimum standards), which provides certainty for interstate recognition for title insurance providers and expands the market for loan originators and investors. This would let lenders offer many more borrowers a new option for closing their mortgage loans while remaining safely at home during pandemic social distancing orders and guidelines. Many states have already seen the value in such a service and have taken action to temporarily allow the process within their borders. New York, Connecticut, Florida, New Hampshire and others have issued executive orders allowing remote notarization in a variety of forms. New Jersey accelerated the passing of their full RON bill to give a full spread of capabilities to borrowers.

Docutech’s Solex eClosing will feature RON capabilities in the product’s April release. For more info, visit the website here to download the solution brief.”

Yes, Docutech put out a write up on, “Ramping up Support for RON.”

From Secure Insight, Andrew Liput sent, “We are in the process of supplementing our 80,000 strong nationwide database identifying attorneys, title agents, mobile notaries, and escrow officers who have eNotary and eClosing experience. Lenders nationwide are seeking trained professionals and we are fielding thousands of your emails and calls to verify and then update your profiles in our system to recognize your talents. We are also launching an online training program Friday, March 27th, in conjunction with the My Professional Educator online training academy, to help bring the basics of eMortgages and eClosings to anyone interested. The post-COVID-19 world for mortgage lending must embrace electronic transactions and we are doing our part to be innovative and lead when it comes to lenders and their closing professional partners.”

Capital markets

U.S. Treasuries rallied yesterday on continued pandemic fears. As expected, initial claims posted the highest ever number recorded, registering over 3 million when the prior record was just under 700k in October 1982. Both initial and continuing claims are expected to increase from here. The report should help provide some context for just how dire the market situation currently is. The third estimate for Q4 GDP showed a 2.1 percent annualized rate of growth, in line with the second estimate, though the report is inconsequential at this juncture. The U.S. 10-year Treasury yield closed the day -5 bps to 0.81 percent.

 

Internationally, it was reported Japan’s government is planning a JPY56 trillion stimulus package that would include direct payments to citizens. The European Central Bank announced that it began purchasing assets under its pandemic emergency purchase program (PEPP) today. Assets eligible for purchase include Greek debt, non-financial commercial paper, and all assets that can be purchased under the existing quantitative easing program. The Bank of England made no changes to its policy stance. Austrian officials opposed the issuance of joint euro debt. Finally Banxico lowered its target rate by 50 bps.

 

For the day, the Desk purchased $35.804 billion MBS of the estimated $50 billion, or 71.6 percent of the expected planned purchases. Total purchases since the Fed restarted QE purchases are now over the initial $200 billion announced, at $209.9 billion. The Desk will again conduct a total of $50 billion in MBS FedTrade operations today. Additionally, the Desk will kick off its buying in agency CMBS today, purchasing up to $1 billion FNMA DUS pools with a 10-year loan term (with maintenance protection term of 9.5-year) with an average life of at least 7-years.

If anyone cares, today’s economic calendar is already under way with February Personal Income and Spending (+.6 percent and +.2 percent), PCE Prices. Later this morning brings Final March Michigan Consumer Sentiment Survey. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding .77 percent

I received this note earlier this week:

We are a week into self-isolation and it’s very upsetting for me to witness my husband standing at the living room window staring aimlessly into space with tears running down his cheeks.

It breaks my heart to see him like this.

I’ve thought very hard of how I can cheer him up.

I’ve even considered letting him in. But rules are rules.

Stay safe, stay well.

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Drinking from a Firehose is Not a Long Term Business Model” If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Do real estate agents provide an essential service?

The real estate industry not only helps provide homes for millions of Americans, but it also creates millions of job opportunities, making the industry a massive driver of the U.S. economy. But with more state and local governments implementing stay-at-home orders, real estate agents are having to redefine how they do business, as they find ways to meet with clients and also maintain the health and safety of all parties involved. 

The latest reports show that at least 212 million people in 22 states, 64 counties, 16 cities and one territory are being urged to stay home. The challenges that arise from all these orders is that each place has a different list of requirements for what a stay-in-place order entails, leaving real estate agents, along with many others (go here for information on notaries, homebuilders and appraisers), to figure out which rules apply to them. 

At the time of publishing, the National Association of Realtors, which is America’s largest trade association representing 1.4 million members, said that the following states have deemed “real estate” to be an essential service, business or operation pursuant to the state’s executive orders: Arizona, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Maine, Minnesota, Mississippi, New Mexico, Nevada, Ohio, Oklahoma, Wisconsin and West Virginia.

“Everyone’s goal is the same right now – to protect the health and wellbeing of our citizens. We must also preserve and defend the fabric of our communities and the critical infrastructure that supports us all,” NAR President Vince Malta said. “NAR is working with state Realtor associations to ensure certain real estate services are deemed ‘essential’ in emergency declarations in order to protect property owners and ensure future economic recovery can occur.” 

“It is important that all services involved in facilitating a real estate transaction remain functional during these unprecedented times; including mortgage, title, insurance, appraisal and government recorder services,” he added. 

According to the association, there are 9.5 million jobs in the real estate, rental and leasing industry, and every two home sales generate one job in this country. 

With this much influence on the U.S. economy, NAR emphasized that housing has been and will continue to be a critical component of the American economy and will be a critical driver of our national recovery.

The rapid spread of COVID-19 coincided with the spring home-buying season, which arrived earlier than its traditional post-Super Bowl debut this year. Now that it’s officially spring, the forecast for what should be the hottest part of home-buying season looks drastically different. 

In the Mortgage Bankers Association’s most recent mortgage applications report, Joel Kan, MBA’s vice president of economic and industry forecasting, warned that potential homebuyers might hold off on purchasing homes until there is a slowdown in the spread of the coronavirus and more clarity on the economic outlook.

There will still be people looking to buy homes this spring even with the growing concerns around the coronavirus, as job and life changes require people to relocate. 

“Each March, around 400,000 to 460,000 homes across the U.S. would be in pending status,” Malta said. “Without designating real estate services as an essential service, Americans currently caught in the middle of a transaction would have no clear path on what happens with their pending legal contracts, financial commitments or – most importantly – where they will be sheltering.”

For the real estate agents who do have to show houses, NAR created a guide to help address some of the common transactional issues they are hearing about. The association strongly encourages all real estate agents to take necessary precautions to ensure their safety and the safety of those around them. 

Many in the industry are also looking at alternative ways to conduct business, with real estate agents switching to electronic forms of marketing properties and communicating with clients. 

According to a recent report from Redfin, they witnessed a 494% increase in requests for agent-led video home tours last week alone. As of Sunday, 18.9% of tour requests from Redfin.com were video-chat tour requests, which was up from 0.2% at the beginning of March, a 94-fold increase, the company said.

While the industry is facing a lot of challenges right now, Dustin Brohm, a HousingWire columnist, national speaker and real estate marketing and lead generation coach, offered some encouragement to real estate agents, urging them to use this time to focus on how they can improve. 

“I can’t think of a better time in the last decade for agents to really put their foot on the gas with the marketing. Take a second to make sure you’re spending money on things that are actually worthwhile, and cut any expenses that aren’t so you can focus those dollars on really making an impact,” Brohm said. “This is such an opportunity to grow your online presence while so many competitors are pushing pause, playing defense, or stopping altogether. It’s also a perfect time to learn a new skill or marketing strategy, finally launch that podcast or YouTube channel, and reconnect with past clients from a position of helpfulness and caring.”

The post Do real estate agents provide an essential service? appeared first on HousingWire.

David Stevens answers 5 questions about the state of the mortgage market

At the beginning of 2020, low-interest rates and strong job growth contributed to a steady climb in consumer-purchasing power, which led to an uptick in both refinance and purchase demand.

But as the COVID-19 pandemic rapidly spread in March, many of the nation’s consumers were either forced to work remotely or not at all, as the incredibly infectious disease forced countless businesses to close their doors.

This, in turn, put pressure on U.S. markets as the Department of Labor reported nearly 3.3 million people filed for unemployment the week ending March 21.

In an effort to stabilize the economy, the Federal Reserve announced a pledge on Monday to purchase unlimited amounts of Treasuries and mortgage bonds, which they believe will grease the wheels of the credit markets.

The purchases also attempt to avoid the type of credit crunch seen after the collapse of the financial system in 2008 and could result in new lows for home-loan rates.

But will these rate declines benefit the
housing market?

In an exclusive video interview, HousingWire spoke to Mountain Lake Consulting’s CEO David Stevens about the economy’s recent turbulence and what the Fed’s decision means for the mortgage industry.

Stevens, who is the former president and CEO of the Mortgage Bankers Association and an industry titan who currently serves several advisory boards, explains why bond-buying may or may not be good for the market.

This interview has been lightly edited for length and
clarity.

Q: This week, the Fed announced the unlimited purchase of
MBS and treasuries, adding multifamily. How do you think this will impact the housing
market overall?

A: That was a critical move, as anybody in the mortgage industry knows rates increased the week prior, and that was due to what we call an imbalance in the supply of mortgage-backed securities in the marketplace.

This was caused by two things: one was the origination pipelines were very full and then secondly, a lot of holders of mortgage-backed securities, were unloading them based on concerns about prepayment speeds.

It was not only causing rates to rise but it was also putting some institutions at risk for margin calls. This could have had a really negative impact on the economy.

So, the pressure was put on the Fed starting late last week, and people were working all through the weekend trying to get an announcement. While we were actually hoping for an announcement Sunday evening, it came Monday morning and it was a critical announcement that they would step in and create what’s called a short in capital market standards, and that has helped bring rates down.

I think as everybody knows, mortgage-backed security pricing really rallied over the last day or so. And while other issues are affecting interest rates, it’s having a really good impact so far.

Q: We know bond-buying is aimed at providing liquidity
and pushing rates lower. Do you think this has the likeliness to bolster the economy?

Well, the variables we’re facing right now are entirely different. Two weeks ago, we were barely talking about the coronavirus, and now, the whole world has changed. So, there’s a lot of things affecting rates.

It’s not just the value of mortgage-backed securities, it’s servicing values and servicing values have worsened fairly significantly.

What we don’t know is the details of the $2 trillion legislative package that has just been announced and hasn’t even been drafted yet. At this point, It’s just the terms on an agreement.

As of today, these things are all going to have an impact on the supply of treasuries in the marketplace, because they’re going to have to raise money to pay for this legislation.

So, on one hand, the bond-buying should drive rates lower under in a traditional sense, but what we don’t know is what the overall supply of debt is going to be and what it ultimately means for interest rates.

Read the rest of the Q&A and watch the full video interview with Stevens below.

The rest of this content is for HW+ members. Join today with a HW+ Membership! Already a member? log in

The post David Stevens answers 5 questions about the state of the mortgage market appeared first on HousingWire.

Are appraisals an essential service?

With the number of states, counties and cities issuing stay-at-home orders increasing every day, the real estate industry is left to quickly interpret whether its functions are considered essential services.

With many moving parts and jobs in the real estate process, appraisers, notaries and homebuilders, along with many other roles, are having to individually interpret their local restrictions to see how they can continue operating. 

The appraisal industry is one of those fields in a tight spot since not only is the majority of an appraiser’s work conducted in person, but they’re experiencing a surge in demand. Their job forces them to enter client homes when social distancing rules are stricter than ever, creating mounting concern as the virus continues to spread throughout the nation.

According to the Appraisal Institute, a global professional association of real estate appraisers, appraisers need to be considered an essential service nationwide. At least 17 states, 26 counties and 10 cities have issued stay-at-home type orders, with more joining the list every day, but of these orders, the Appraisal Institute found that only a handful of states and localities have explicitly cited real estate appraisers under essential worker classifications. Meanwhile, others are not being as specific, causing inconsistency and confusion for appraisers. 

The Appraisal Institute compiled a list of statewide stay-at-home, shelter-in-place or non-essential business closure orders, noting when possible if the order explicitly states appraisers as an essential service.

As more localities implement similar orders, the Appraisal Institute is working with governments to include appraisers as part of essential services, so they’re exempt from stay-at-home orders. 

On Thursday, the Appraisal Institute, along with the National Association of Realtors, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the Massachusetts Board of Real Estate Appraisers told the National Governors Association, the National Association of Counties, the U.S. Conference of Mayors and the National League of Cities that they are concerned about ramifications and unintended consequences if appraisal services are not deemed to be essential services. 

They collectively asked the groups to exempt appraisers, stating, “Appraisers are performing critical and timely services for real estate-related transactions, many of which will continue to take place during this crisis, and that will help to keep the economy functioning.” 

“Everyone’s goal is the same – to protect the health and well-being of our citizens,” the joint letter stated. “But we must also protect and preserve the fabric of our communities and the critical infrastructure that supports and protects us all.”

Ken Chitester, communications director with the Appraisal Institute, said the Illinois Executive Order 2020-10 best deals with the provision of appraisal services as an essential service for financial institutions and as a regulated professional service.

The appraisers who are still operating and going into houses are advised to take adequate precautions to protect themselves, including social distancing, use of personal protective equipment and limited human interaction. 

While the associations are working hard to exempt appraisers, the Appraisal Institute added that if an appraiser doesn’t feel comfortable entering a property, they can refuse the assignment and seek work that doesn’t require an interior inspection. 

“In fact, major users of appraisal services have temporarily changed their policies in the past week to facilitate and encourage exterior-only or drive-by appraisals that avoid person-to-person contact,” Chitester said. 

Apart from the letter, the government has announced initiatives to lessen the need for appraisals during the COVID-19 pandemic. Earlier this week, the Federal Housing Finance Agency stated that it is directing Fannie Mae and Freddie Mac to ease their standards for both property appraisals and verification of employment. The entities said that they would use “appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages.” 

As the news continues to develop, there are appraisers like Brady Enlow, who is based in Texas, who are opting to conduct business while taking the necessary precautions as outlined by the federal and local governments in his market area.

“I believe this is related to our integral part of the financial services industry,” Enlow said. “However, it should be noted that I am aware of some peers that are not working during the pandemic, or at least only completing appraisal orders that do not require an interior inspection.”

Given the rapid spread of the coronavirus, Enlow added, “The fact that appraisers are essential workers in some places does not mean that all appraisers will continue to do interior site visits.  I think many people across the country are fearful and don’t want to put themselves at heightened risk.” 

This is a developing story and will be updated with information and quotes as they come in.

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Zillow is terminating closing contracts, citing coronavirus concerns

The concept and perceived benefit of iBuyers rests in the little “i” in front of the word. It stands for “instant,” because when a homeowner chooses to sell their home through an iBuyer, they simply fill out a form, get a bid and can sell within a short period of time.

For the seller, this means no staging, no open houses and no need to wait on the buyer to get their affairs in order. But what happens to the seller when iBuyers suddenly stop buying?

Over the past few weeks, iBuyers across the board have been pressing pause on the service, citing coronavirus concerns.

In a town hall conference call on Monday, Zillow Co-Founder and CEO Rich Barton said that the company would work with customers the best that they can, given the situation.

“We are working with existing customers to cancel our existing contracts to the greatest extent we can. We’ll do this in a humane way,” Barton said. “This is clearly a material adverse change, so we’ll be taking that position and then evaluating, on a case-by-case basis, what we actually do and using some financial incentives to largely extricate – to hopefully largely extricate ourselves from those transactions.”

Meanwhile, Jeramiah Dooley is trying to sell his townhome in Charlotte, North Carolina, through Zillow Offers. He told HousingWire he chose Zillow in comparison to other iBuyers because it was the best offer he received.

“We took [the offer] and signed the contract on January 13, and they gave me up to 90 days to close which was perfect because I am scheduled to actually move on the 30th of this month,” Dooley said. “Then the day before yesterday, I got the same email that looks like everyone has gotten, basically blaming the latest public health orders issued for a wholesale cancellation of every house that Zillow had under contract to buy.”

Dooley said he was given 48 hours to choose between two options from Zillow. Zillow would either give him $5,000, which is $4,000 more than the earnest money that they would forfeit for breaking the contract, or they’d pay all of the sellers costs for a local Realtor group to put the house up on the market.

After he accepted the offer to take the $5,000 payment, Dooley was sent a “Coronavirus Termination of Real Estate Agreement” from the iBuyer.

Now paying two mortgages, Dooley said he has another important decision to make.

“I can refinance the mortgage on the house that was under contract but then I lose all of the equity that is in it,” Dooley said. “And I don’t realize anything out of the transaction but the mortgage gets lower. I can try to rent it out, or I can just hold on for however long it takes for the housing market to get back to normal, and then figure out if there’s a market out there to buy it, and I don’t really have a whole lot of choices.

According to Dooly, if the iBuyer didn’t hear from him in 48 hours, Zillow would pull the contract.

This was the same case for Crystal and Nicholas Thornton, who used Zillow Offers in Marietta, Georgia, to sell their home quickly and move into a new one with profits from their current house as a downpayment.

The Thorntons were also offered the two choices, but were disappointed in the outcome of the whole transaction.

“We’re going to stay put because part of the reason that this was so important is because once we sold this house, that also helped us with our 20% down payment,” Thornton said. “That was the main reason why we went with Zillow because if you do it the traditional way, you basically have to wait and hope that people come look at the house. Once you’re on the contract, they follow through with it.”

“We’re not in a position where we can just put our house up for sale and then purchase another home only to have two mortgages, because we want to have that 20% down because we don’t want that PMI insurance,” Thornton continued. “So that’s one of the main reasons that we went with Zillow Offers, because with what we were trying to get, and then the school zone, size, and the price, those are rare. So this was just supposed to work, there’s no reason this shouldn’t have worked.”

In a statement from Zillow Spokesperson Viet Shelton, the company said they hope to pick things back up again once the COVID-19 dust settles.

“We are incredibly sorry for the inconvenience and disruption people may experience as a result of our decision to pause home buying through Zillow Offers,” Shelton said. “This is not a decision made lightly, and was solely driven by COVID-19 health concerns and resulting market uncertainty. In addition to providing added financial support to help each seller, we are also doing our best to support our buyers in contract who can no longer purchase their home from Zillow. These are unprecedented times and we are committed to re-engaging customers through Zillow Offers as soon as it is viable to do so.”

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Homebuilders: An essential business that “backstops the economy”

As the housing industry adapts to navigate COVID-19, there is one sector that is mostly carrying on with business as usual. Even as states are locking down and ordering residents to stay at home, homebuilders are continuing to work. That’s because every state except Pennsylvania has declared homebuilders essential workers, according to the National Association of Home Builders CEO Jerry Howard. 

According to Howard, homebuilders are going to propel the economy forward after the coronavirus recession. “If you keep our demands moving forward, you will keep other sectors engaged, and hopefully help get them through this downtime,” Howard explained. 

But that isn’t the only reason why homebuilders need to keep working.

Homebuilders are essential workers

Unlike other members of the housing industry that have flexed their remote capabilities in the past weeks, builders, for obvious reasons, don’t have this opportunity and remain working on site.

“Because of the nature of our business, it’s very easy to comply with the safety standards,” Howard said. “It’s easy to have fewer than 10 people on a job site. It’s easy to keep those people who are onsite six-feet apart.”

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Fed Chairman contradicts Trump’s coronavirus timeline

In a rare television interview, Federal Reserve Chairman Jerome Powell told Today show co-anchor Savannah Guthrie the U.S. economy can’t reopen until the coronavirus pandemic is under control.

“The virus is going to set the timeline,” a grim-looking Powell said on the NBC morning show on Thursday.

Powell’s comments contradict President Donald Trump’s calls for “packed churches” on Easter, just over two weeks away. Easter Sunday would be a “beautiful timeline” for reopening the economy, Trump said at a press briefing at the White House on Tuesday.

The Fed chairman had a different outlook.

“The sooner we get the spread of the virus under control, people will regain confidence,” Powell said in the interview. “When they become confident that is the case, they will very willingly open their businesses up, go back to work, the consumer will be spending. So I think the first order of business will be to get the spread of the virus under control and then resume economic activity.”

The head of the central bank rarely gives sit-down interviews. He typically only speaks to reporters during formal press conferences after the Fed’s meetings to answer questions on monetary policy. During the financial crisis, as the U.S. teetered on the brink of a depression, Ben Bernanke, then chairman of the Fed, never took part in a TV interview.

While Guthrie asked Powell the obligatory question about an economic recession, and Powell affirmed the U.S. likely is experiencing a GDP contraction, that wasn’t the news. There is no major U.S. economic forecaster who isn’t projecting a recession.

However, the chairman’s projected it likely would be short, and the rebound sharp. The Fed pledged on Monday it would buy unlimited bonds and take other measures to keep credit flowing.

“This is a unique situation,” said Powell. “This is not a typical downturn” because it’s not due to an underlying weakness in the economy or instability in the banking system, he said.

Republican and Democratic state governors have issued “stay at home” orders for more than half the U.S. population, restricting activity to necessary tasks such as shopping for food. The goal is to slow the spread of the coronavirus to avoid overwhelming hospitals.

States with stay-at-home orders include Ohio, Michigan, Colorado, Connecticut, Massachusetts, Louisiana, Minnesota, New Jersey, New Mexico, New York and Utah. Other states, such as Texas and Pennsylvania, have issued restrictions in some counties.

Part of the reason people are being urged to stay at home is the breakdown in testing – in the absence of a quick way to know who is carrying COVID-19, people have to act as if anyone might be carrying the disease. Nations doing widespread testing, like Iceland, have found about half the people who test positive for the disease are showing no symptoms, yet are still contagious.

The way public health officials traditionally get epidemics under control is testing to identify and isolate the sick, tracking their contacts, and seeing if those people have been infected – much like South Korea handled the pandemic.

The U.S. and South Korea had their first cases of coronavirus detected on the same day. South Korea quickly ramped up to more than 10,000 tests a day, many of them in drive-through facilities, with most people getting their results within hours. The COVID-19 outbreak peaked in that nation of 51 million people on March 2 and has been in sharp decline since then, according to data from Johns Hopkins University.

In the U.S., testing for COVID-19 is still limited, and the disease is still on the upswing. Public health officials in many areas of the country have said in recent days that tests are restricted to health care workers and hospitalized patients because of a shortage of test kits, swabs to administer the tests, and protective equipment to keep safe the workers doing the testing. In most cases it takes days, and sometimes more than a week, to get results.

“We would tend to listen to the experts,” for setting a timetable to resume normal activity, Powell said in the NBC interview, citing Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases and a member of the White House Coronavirus Task Force.

Trump has nixed that type of sentiment, saying at a White House briefing on Tuesday that if public health experts had their way they would “shut down the entire world.” The president pointed out in a tweet on Tuesday that people are killed in car crashes, but the U.S. still allows driving.

“Look at automobile accidents, which are far greater than any numbers we’re talking about,” Trump said in the tweet. “That doesn’t mean we’re going to tell everybody, ‘No more driving of cars.’ So we have to do things to get our country open.”

In fact, while the White House issued guidelines recommending social distancing for 15 days to slow the spread of the coronavirus, Trump didn’t shut down any states, and it would be difficult for him to force unwilling governors to rescind those orders.

Powell said in the Today interview it’s better to rely on the experts.

“We’re not experts in pandemics over here,” he said, referring to the Federal Reserve. “We don’t get to make that decision. I would say that we would tend to listen to the experts.”

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CFPB releases lenders from quarterly HMDA reporting

The Consumer Financial Protection Bureau is relaxing some of its requirements for lenders as coronavirus continues to spread. Temporarily, the CFPB will no longer require certain lenders to report quarterly information under the Home Mortgage Disclosure Act.

The CFPB said it is working to provide flexibility to enable financial institutions to work with consumers as they respond to COVID-19, the disease caused by the coronavirus. Because of the pandemic, it will postpone some data collections from the industry to allow lenders to focus on responding to consumer needs. Currently, at least 200 million people in 21 states, 47 counties and 14 cities are being urged to stay home, according to the New York Times.

“As consumers seek temporary relief from lenders, the
pandemic is impacting the operations of financial companies that are eager to
help their customers during this unprecedented time,” CFPB Director Kathleen Kraninger
said.  “Our actions today are temporary
and targeted to support consumers by allowing financial companies to focus
their resources on assisting consumers.”

And the mortgage industry is certainly working to do just that. The mortgage industry’s biggest trade and lobbying groups are banding together to push the federal government for widespread relief for all borrowers affected by the coronavirus outbreak in the U.S.

In addition to not expecting HMDA quarterly reporting, the CFPB
will also not expect the reporting of certain information related to credit
card and prepaid accounts under the Truth in Lending Act, Regulation Z, and
Regulation E. This includes the annual submissions concerning agreements
between credit card issuers and institutions of higher education; quarterly
submission of consumer credit card agreements; collection of certain credit
card price and availability information; and submission of prepaid account
agreements and related information.

“The Bureau, along with our state and federal partners, have
released prior guidance encouraging financial institutions to work
constructively with borrowers and other customers affected by COVID-19 to meet
their financial needs,” Kraninger said. “We will continue to issue additional
guidance and policies to facilitate the ongoing collaborative relationship
between companies and their customers during this time.”

The CFPB said lenders should continue collecting HMDA data
to report it in its annual filings, and that it will provide new information when
lenders need to resume quarterly HMDA reporting.

The following data collections are being postponed:

  • A survey of financial institutions that seeks information on the cost of compliance in connection with pending rulemaking on Section 1071 of the Dodd-Frank Act
  • A survey of firms providing Property Assessed Clean Energy financing to consumers for the purposes of implementing Section 307 of the Economic Growth, Regulatory Relief and Consumer Protection Act.

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