Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Potential Drop in Home Prices in Certain Markets & The Need for Technology. This week we’re bringing you: What Does The Mortgage Industry’s Post-Pandemic Future Hold?
Fannie Mae, Freddie Mac: Mortgages in forbearance do not need to be paid back all at once*
GSEs reiterate that lump sum repayments are not required
Recent data shows that there are nearly 3.5 million borrowers already in forbearance as the coronavirus shutdown continues to impact the economy.
And with that figure seemingly growing by tens of thousands of borrowers every day, the issue of what happens to those borrowers when their forbearance period ends is becoming a big problem.
Borrowers in forbearance will have to repay their missed mortgage payments one way or another, but there appears to be a growing number of borrowers who think they have to repay all their missed payments in one lump sum, either because they’re confused about their options or because that’s what their mortgage servicer told them.
But that’s not actually the case, according to the two biggest sources of mortgage financing in the country. Read more in-depth here.
Mortgage Market Shows Resilience, Refis Continue to Dominate Freddie’s Volume*
Freddie Mac reported this week that its total mortgage portfolio increased at an annualized rate of 9.2 percent in March, up from a 5.5 percent gain in February. The portfolio balance at the end of the period was $2.368 trillion compared to $2.350 trillion at the end of February and $2.204 trillion a year earlier. The growth rate for the year to date is 6.4 percent.
Purchases and Issuances totaled $58.830 billion and Sales were ($3.165) billion. The February numbers were $46.054 billion and ($1.041) billion, respectively.
Single-family refinance loan purchase and guarantee volume was $33.300 billion in March compared to $23.800 billion in February and representing a 63 percent share of total single-family mortgage portfolio purchases and issuances compared to 59 percent the previous month. Read more in-depth here.
What does the mortgage industry’s post-pandemic future hold?*
The challenges facing the mortgage industry were raised by three prominent industry leaders during a webinar sponsored by the National Association of Minority Mortgage Brokers of America.
Kristy Fercho, president of mortgage at Flagstar Bank in Troy, Michigan, predicted that in 12 months the industry will “still be dealing with the remnants of COVID.” She noted that her bank sent all of its employees home on March 13 to test its telecommuting system and business continuity plan, not realizing that the state would issue a shelter-in-place edict that week. And while the work-from-home set-up has not been problematic, Fercho wondered what will happen when it is finally lifted. Read more in-depth here.
The Top 10 Cities Where You Can Bank the Most Cash by Refinancing Right Now*
When professional cyclist Phil Gaimon saw that interest rates had dropped in early March, he decided to call his mortgage broker, pronto.
By March 28, Gaimon, 34, had locked in a rate of 3.375% for the two-bedroom, two-bathroom townhouse he purchased in the Los Angeles neighborhood of Toluca Lake in 2014—nearly a whole point less than his original rate of 4.2% for a 30-year fixed-rate mortgage. When it closes, he will be saving $480 a month.
“I just saw the rates went down and was, like, cool, I can take advantage of that,” he says. “You can work [extra] and make that $500 a month, or save it on your mortgage.” Read more in-depth here.
Housing demand may have started to bounce back from coronavirus impact*
Sales of both newly built and existing homes tanked in March, as potential buyers hunkered down and potential sellers pulled their homes from the market, both watching their economy in free fall from the coronavirus.
Now, suddenly, buyer demand at least may be climbing back.
Pending home sales — a measure of signed contracts, not closings — are about 32% lower annually now, according to research by Zillow. But the week-over-week change in pending sales turned positive in the week ending April 15. Pending sales were up 6.2% week over week as of the seven days ending April 19. Read more in-depth here.
Robots, AI, and the road to a fully autonomous construction industry*
Built Robotics executives are fond of saying that their autonomous system for construction equipment, like dozers and excavators, might be further along than many autonomous vehicles. In fact, CEO Noah Ready-Campbell insists you’ll see autonomous vehicles in controlled industrial environments — like construction sites — before you see level 5 driverless cars on public roads. That may be in part because autonomous construction equipment often operates on privately owned land, while public roads face increased regulatory scrutiny.
“There’s a quote that ‘Cold fusion is 20 years in the future and always will be,’” Ready-Campbell told VentureBeat. “I think there’s a chance that that might be true for level 5 self-driving cars as well.” Read more in-depth here.
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