Bay Area Shutdown; COVID-19 Update; Delays; Appraiser Shortage; Rates Not Falling

Man looks up interest rates from home on a laptop during the Bay Area shutdown due to the Shelter in Place order to prevent the spread of COVID-19.

Man wearing respiratory mask looks up interest rates from home on a laptop during the Bay Area shutdown due to the Shelter in Place order to prevent the spread of COVID-19.

As everyone in the Bay Area now knows, the entire Bay Area is subject to a mass “Shelter in Place” order by local health authorities in an effort to combat the spread of COVID-19.

I won’t go into all of the details here, but it restricts all large gatherings and major events, and only “essential businesses” are allowed to remain in full operation.

Essential businesses include banks, pharmacies, supermarkets, gas stations, post offices, etc.

EFFECT ON MORTGAGE INDUSTRY

JVM Lending is still in operation – although most of our staff is working from home now.

Hence, we are still doing everything we normally do – including pre-approving borrowers, supporting agents, locking loans, processing loans and funding loans.

ESCROW/TITLE

Most escrow and title companies remain operational too – able to do everything they normally do including signing borrowers – either in-office or via a mobile notary.

COUNTIES/RECORDING

Currently, most Bay Area counties are still allowing recently funded transactions to record – but this may change – so we are watching the situation carefully.

CLOSING WITHOUT RECORDING

Some title companies are still issuing title insurance and allowing transactions to close even if they cannot record. They are telling us to tell borrowers that they are still protected with specific language in every title insurance policy.

EXPECT DELAYS

Appraisers: We are having great difficulty finding appraisers and/or maintaining appraisal turn-times for several reasons: (1) A surprisingly high percentage of licensed appraisers are older and thus at a much higher risk of suffering complications from COVID-19; (2) Many appraisers understandably don’t want to take risks in any case; and (3) The enormous surge in refi volume has swamped appraisers in general.

Multiple Parties: As I mentioned last week, every transaction requires the participation of numerous parties – including appraisers, underwriters, processors, funders, closers, HR departments at employers, the IRS, insurers, escrow companies and title companies. With all of the disruptions right now, we often experience delays b/c one of these many parties we rely on is unable to complete their particular job or task at hand.

Volume: Mass excess volume from refis is the other reason there are delays, as I have mentioned time and again.