FORBEARANCE IMPAIRS CREDIT – DESPITE “CARES ACT”
On Saturday, David Stevens, former President of the Mortgage Bankers Association and the current CEO of Mountain Lake Consulting, posted a notice on LinkedIn stating that some creditors and credit bureaus are in fact showing mortgages in forbearance as “late” and “in forbearance” on credit reports.
According to Mr. Stevens, this may be because Fannie Mae and Freddie Mac have not provided specific direction to lenders, servicers and credit bureaus.
In any case, when this happens, borrowers in forbearance will see their credit adversely impacted even though the recently passed “CARES Act” stated that forbearances will not impact credit.
Hence, we strongly advise borrowers seeking forbearances to discuss the potential impact on their credit with their servicer, and to get a promise in writing from their servicer that their credit will not be impacted if possible.
This is extremely important b/c we have been reporting that borrowers who get a formal approval for their forbearance will not see their credit impacted, per the CARES Act.
PURCHASE MARKET = 50% OF NORMAL & STRONGER THAN NOV/DEC “NORMAL”
I have mentioned this a few times but am repeating it b/c I continue to get more data corroborating this.
We are in multiple Texas and California markets so I am unable to generalize across all of them, but it appears that even some of our hardest-hit markets are still seeing purchase activity equal to about 50% of “normal” volume for this time of year.
Contracts continue to roll in from buyers who: (1) still have to move for life-reasons; (2) want to take advantage of low rates; (3) want to buy in a more flexible market; and/or (4) just want to buy b/c they’re finding homes they love.
In many markets, there is more activity now than there is in November and December.
In Austin, TX in fact, our purchase application numbers are currently at levels we saw in February, prior to the COVID-19 crisis.
So, this is just another reminder that there is still a lot of business worth pursuing. 😊
TEXAS COMES BACK TO LIFE
In a great sign for Texas, The Austin Business Journal reported Friday that Governor Abbot is taking “initial steps” to reopen parts of the Texas economy.
Schools will remain closed, but state parks, retail establishments and many other businesses will be reopening this week.
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