You might think that our recent experience with the Great Recession liquidity crisis would be a light reminder of what was possible when COVID-19 hit the US in March 2020.
The Federal Reserve issued a press release at 5:00 pm on Sunday that same month, informing everyone that the coronavirus outbreak has disrupted economic activity. The federal funds rate fell to a range from zero to 1/4%.
It was the Fed’s way of reassuring America that we got it, we are monitoring the situation.
At 9:00 pm on Saturday, March 21, at 9:00 pm, Mortgage Bankers Association President Robert Broxmith sent an email to Federal Reserve Chairman Jerome Powell and then Treasury Secretary Stephen Mnuchin warning that the mortgage market would close next Monday unless the Fed announces about your plans. purchase of mortgage-backed securities.
The next Monday morning, the Fed announced that it would indeed buy enough mortgage-backed securities to keep the market working. The market did not crash.
It was one of the most interesting stories told at the California Association of Mortgage Bankers’ conference held in Dana Point last Tuesday through Thursday, August 24-26.
While there, I surveyed many of the 650 registered members, among other things, what has the mortgage industry done in recent years to make the world a better place for consumers? Below are some of their responses.
- Shea Pallante, President of Sprout Mortgage, noted the amazing transparency, affordability and user-friendly technology available to consumers. He cited two of the country’s largest lenders as examples: Rocket Mortgage and United Wholesale Mortgage.
- Joe Dalin, head of strategy at Home Scout, noted the broad technological advancements. “Mortgage lenders and mortgage lenders have made a record volume of business working from home last year and this year.”
- John Hedlund, chief operating officer and managing director of AmeriHome Mortgage, cited the rejection of the valuation. And he pointed to the costs and time that consumers are saving as mortgages are processed faster and cheaper.
- Paul Bloom, regional vice president of Certified Credit, sees much higher levels of consumer confidence and confidence in mortgage lenders in online reviews. “Consumers can do more in their hands,” Bloom said.
- Carissa Orozco, director of business development at Reverse Vision, cited a reverse mortgage clause requiring seniors to demonstrate that they are capable of paying taxes and insurance. Nobody wants a borrower to go bankrupt and be foreclosed.
Question two: What are the weaknesses in the mortgage industry that need fixing from a consumer perspective?
- Wesley Hoglund, CEO of Lenox Financial Mortgage Corp., believes that it is too difficult to obtain a mortgage, and the process is too slow. “Why can you go to a Porsche dealer and buy a Targa for $ 165,000 in 30 minutes, but not on the mortgage,” Hoglund asked.
- Alex Kutsishin, CEO of sales for Boomerang, complained that lenders were spamming customers after the close of a mortgage deal, repeatedly sending out meaningless and unnecessary offers to sell products that were clearly no longer needed.
- Braxmith believes the industry needs to address the gap in home ownership between whites and minorities.
- Pallante said consumers need to be more aware of the mortgage process and the wide variety of mortgages available. It all starts with educating ignorant loan officers who too often reject suitable borrowers.
Freddie Mac appreciated the news: The 30-year fixed rate averaged 2.87%, which is 1 basis point higher than last week. The 15-year fixed rate averaged 2.17%, also 1 basis point higher than last week.
The Mortgage Bankers Association reported a 1.6% increase in mortgage applications from the previous week.
Bottom line: Assuming that the borrower receives an average 30-year flat rate on the corresponding loan of $ 548,250, last year’s payment was $ 12 more than this week’s payment of $ 2,273.
What do I see: Locally, highly qualified borrowers can obtain the following fixed rate mortgages at 1 point: 30-year FHA at 2.25%, 15-year standard at 1.875%, 30-year standard at 2.5%, 15-year conditional a high balance ($ 548,251 to $ 822,375) at 2.125%, a 30-year regular high balance at 2.75%, and a 30-year fixed large balance at 2.875%.
Eye-catching Credit of the Week: 30 year flat rate at 2.625% at 2 pips.
Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or firstname.lastname@example.org. His site www.mortgagegrader.com…