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Mortgage Rates (6 Viewers)

fruity pebbles said:
What are you seeing for rates?
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For conforming loans seeing about .25-.375 higher then a few weeks ago for same lock time. Closer to a .25 but then lock times are not really applicable either. Got all that business from the boom a few weeks ago to sort out, tons of staff working from home, issues ranging from appraisers not wanting to enter homes to issues with ability to record mortgages, need for same day VVOE as closing, etc, etc. Just a lot of stuff  that is slowing the process down so things are moving a little slow and need longer lock times.

I'm seeing jumbo loan rates much higher, but that is prone to have more variance with different lenders.

As Chadstroma pointed out in an earlier post it's a blood bath in the non-QM market. That feels more like 2008 then anything I've experienced since, as in here yesterday and gone today kind of thing.

 
Chadstroma said:
All over the board. But generally slightly worst than they were a couple of weeks ago when this all started and people started refinancing in mass.
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Slightly worse isn't bad. But Jesus I saw some quoting 30 year rates closer to 5% than 4%. That'll kill the new purchase market with everything else going on.

 
Just praying we can close on the sale of our flip house next week. Been having a hard time getting contractors out to get minor inspection items resolved. Some of the specialty stores we get supplies from have closed up indefinitely until Corona calms down.

Hearing from some agents that they are swamped and others that it is totally dead. Housing market generally lags so we'll have to see. My gut tells me that the ones that are swamped are dealing with buyers that already locked or working with cash but a lot of that will dry up soon enough as locks expire. Inventory is so low though as no one wants to sell that will probably make things seem ok for the most part.

One agent told me FHA let them close on a purchase even though the buyer has been furloughed for 30 days, all they wanted was a piece of paper from the employer basically saying "yes, he'll be able to come back to work in 30 days." That sounds bonkers to me and a recipe for disaster but I am not in lending.

 
menobrown said:
For conforming loans seeing about .25-.375 higher then a few weeks ago for same lock time. Closer to a .25 but then lock times are not really applicable either. Got all that business from the boom a few weeks ago to sort out, tons of staff working from home, issues ranging from appraisers not wanting to enter homes to issues with ability to record mortgages, need for same day VVOE as closing, etc, etc. Just a lot of stuff  that is slowing the process down so things are moving a little slow and need longer lock times.

I'm seeing jumbo loan rates much higher, but that is prone to have more variance with different lenders.

As Chadstroma pointed out in an earlier post it's a blood bath in the non-QM market. That feels more like 2008 then anything I've experienced since, as in here yesterday and gone today kind of thing.
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Non-QM is dead. Only a few are "lending" but I don't trust them. It will come back but no one is buying paper right now except the Fed which is all conforming. 

 
fruity pebbles said:
Slightly worse isn't bad. But Jesus I saw some quoting 30 year rates closer to 5% than 4%. That'll kill the new purchase market with everything else going on.
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Yes, all 4's and 5's as of Friday. 

(Some dude late to the party sent a friend of mine a message Friday saying he got quoted in the 4's and didn't want my friend to waste his time anything that wasn't a 2... a good amount of brokers had a good laugh about that)

Now, mostly 3's. Locks sre basically 45 days even if the lender can get it done before because you have no idea how much gime everything else will take. I have one lender on 60 for refi and will not lock less. 

Once we are out of crisis mode, things will stabilize and normsl market mechanism should return and rates will be near, if not actual new, all time lows. At least I believe that. 

 
Buckna said:
Just praying we can close on the sale of our flip house next week. Been having a hard time getting contractors out to get minor inspection items resolved. Some of the specialty stores we get supplies from have closed up indefinitely until Corona calms down.

Hearing from some agents that they are swamped and others that it is totally dead. Housing market generally lags so we'll have to see. My gut tells me that the ones that are swamped are dealing with buyers that already locked or working with cash but a lot of that will dry up soon enough as locks expire. Inventory is so low though as no one wants to sell that will probably make things seem ok for the most part.

One agent told me FHA let them close on a purchase even though the buyer has been furloughed for 30 days, all they wanted was a piece of paper from the employer basically saying "yes, he'll be able to come back to work in 30 days." That sounds bonkers to me and a recipe for disaster but I am not in lending.
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Realtors are crazy folk. They will get do an open house with both houses next door on fire, an active riot and a wild animal stampede rolling through the front yard then talk about the added warmth, city character and being close to nature. 

 
Got quoted 3.25 on a 30 year refi with a 90 day lock (they won’t do less given the time it’s taking to close). Said I could buy an option to float the rate and get the lower rate if it would go down for 0.25% of loan, which is around $700.

Think it makes sense to pay for that option?

 
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Chadstroma said:
What I am seeing right now: 

Non-QM is basically dead (non-QM being pretty much any loan that does not fall into the conventional, government backed and jumbo loan boxes) no one is buying up the paper. Jumbo is near dead with the same issue. 

Conventional and government backed are still doing but the rates have skyrocketed. An example, I am trying to close a loan today (trying because I can't get a verbal VOE and it is suppose to close in an hour) which is at 3.35% that same loan if we locked today would be 5%. 

Lenders seem to be healthy but there is just no appetite for mortgage backed securities and in order to sell the loans off the books the rates are being jacked up in order for investors to bite. Before reluctance to buy was really based on fears of EPO's which would diminish return. Now it seems the fears are shifting to higher rates of defaults. My personal view is that this is temporary and based on being in the middle of a crisis with no known exit point yet. Fear is driving all markets including the MBS market. 

There are major disruptions to pretty much the entire loan process right now as you can guess with America working from home. 
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Thanks for the inside look, much appreciated. :thumbup:

 
Here is some info on what is going on mortgage loan related with the crisis.

• MORTGAGE RATES: The big news is the Fed announced that they will purchase as much US debt as necessary to stabilize the economy. This will include buying lots of mortgage debt, which should help keep mortgage rates low for some time.

• PAYMENT DEFERMENT: Fannie Mae and Freddie Mac plans to initiate a mortgage forbearance program allowing some borrowers relief of up to 12 months of mortgage payments. The plan will reduce, or delay payments, and will depend on the borrower's loss of income during the COVID 19 outbreak. Important to note that this does not eliminate the debt payments. It only defers them. Borrowers should continue to make their usual payments until granted the relief. This plan will not affect the borrower’s credit. DO NOT STOP MAKING PAYMENTS ON YOUR OWN!! For more information, contact your current servicer.

• APPRAISALS: Fannie Mae and Freddie Mac are changing the requirements for physical inspections for some appraisals. If an appraiser cannot go inside the home, for any reason, they will allow desktop and exterior-only appraisals on primary residence purchases and second homes/investment purchases with 15% down or more.

• VERIFICATION OF EMPLOYMENT: Fannie Mae and Freddie Mac came out with guidelines today that allow for more flexibility and alternatives in verifying employment for customers whose workplaces are temporarily closed. They also allowed for some flexibility for those on leave but did caution lenders to use their best judgement when making loan decisions to ensure the borrower clearly has the ability to repay the loan.

• CONGRESS STIMULUS AND RELIEF BILL: Congress is currently in a stalemate over the administration's proposed stimulus plan. Although it’s expect they will find common ground very soon, this debate will continue to affect markets. News reports this morning suggest a deal is close to being done which will be helpful in whatever form it takes.

• NON QM AND JUMBO LOANS: Due to extreme market volatility, most (all really) Non QM and, even some jumbo lenders, have suspended all loan applications, locks, closings and funding's at this time. Non QM loans are non-traditional loans like bank statement loans, no doc investment loans and some other asset based loans. These loans are not backed by Fannie Mae and Freddie Mac, nor the government, so loan investors have pulled the plug, or substantially raised the rates, out of economic uncertainty.

• LOCKS: Many lenders are moving to no longer locking loans in until a CTC is obtained. I think that this may be adopted by many lenders moving forward until business returns to normal.

***IMPORTANT: During the mortgage meltdown of 2008, loan guidelines changed nearly every day, for months, as loan investors tried to get their arms around the crisis. We are in a similar place. What’s true today could be untrue tomorrow. Circumstances around loans can change without notice and without any control to do anything about it.***

 
One more update...

• GINNIE MAE MSR MARKET EVAPORATING: The typical buyers of Ginnie Mae’s servicing are not buying. This may have direct impact on lower end credit scores for government backed loans (USDA, VA, FHA) as lenders will adjust for higher risk. Overlays decreasing Debt to Income Ratios and other risk adjustments are likely which will mean these loans will be harder to obtain and if approved will be for lower dollar amounts.

 
Chadstroma said:
One more update...

• GINNIE MAE MSR MARKET EVAPORATING: The typical buyers of Ginnie Mae’s servicing are not buying. This may have direct impact on lower end credit scores for government backed loans (USDA, VA, FHA) as lenders will adjust for higher risk. Overlays decreasing Debt to Income Ratios and other risk adjustments are likely which will mean these loans will be harder to obtain and if approved will be for lower dollar amounts.
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Several lenders coming out with guidance of 640 being min credit score. 

 
Chadstroma said:
***IMPORTANT: During the mortgage meltdown of 2008, loan guidelines changed nearly every day, for months, as loan investors tried to get their arms around the crisis. 
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LOL...  This was the three months I was a loan officer.  I had 5 deals at the end of my third month.  And then the #### hit the fan and the programs changed every day, sometimes more than once, and all five wound up be canceled.  

 
Chadstroma said:
Several lenders coming out with guidance of 640 being min credit score. 
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We're still at 580 but we also retain the servicing. 
 

The big announcement we got yesterday was having to do VVOE within 24 hours of funding on conventional loans and having to specifically ask if they're furloughed. No income, no loan.
 

Holy hell this is getting crazy. 

 
Sandeman said:
Is this a good time to consider a HELOC for home improvements presuming we maintain our income streams? Excellent credit.
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Absolutely prime rate is very low.

However if you are going to stay long term look at a cash out refi instead with rates so low.

 
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One said:
I just finished mine. Everything went great. 

Whats funny is Saturday my wife had us sign our loan docs in the driveway.  She didn’t want the notary in our house. 
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Buyers for our closing on April 3rd asked for an extension today due to Stay At Home issued. I certainly understand their skittishness but there's no guarantee that will be lifted after 2 weeks is up. Trying to convince them to close some other way and this is one idea that has been floated.

 
Sandeman said:
Is this a good time to consider a HELOC for home improvements presuming we maintain our income streams? Excellent credit.
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If you can get one, might jump on it or check out a cash-out refinance as mentioned above. I am not in lending, but one lender told me a few days ago that she was hearing that many of the banks that specialize in HELOC's have stopped taking new applications until things settle down/normalize.

 
Buckna said:
If you can get one, might jump on it or check out a cash-out refinance as mentioned above. I am not in lending, but one lender told me a few days ago that she was hearing that many of the banks that specialize in HELOC's have stopped taking new applications until things settle down/normalize.
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I've emailed my banker at WF. Let's see what she says.

My mortgage lender (not WF) has said a cash-out refi comes at a higher rate than a standard one. We are currently at 3.625 (refi'd in December). If we wanted $200k, would we have to take on a higher rate or is there another way of going about it?

 
One said:
I just finished mine. Everything went great. 

Whats funny is Saturday my wife had us sign our loan docs in the driveway.  She didn’t want the notary in our house. 
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Not uncommon right now. Another broker told me about telling the client to basically do the closing with the notary on the porch while they were in the house. Such are the times we are living in. 

 
Sandeman said:
I've emailed my banker at WF. Let's see what she says.

My mortgage lender (not WF) has said a cash-out refi comes at a higher rate than a standard one. We are currently at 3.625 (refi'd in December). If we wanted $200k, would we have to take on a higher rate or is there another way of going about it?
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Yes, cash out costs more than a rate/term refi. At 3.625% right now you are best off doing a HELOC. You may want to advance on it right away and deposit the cash in the bank. In the deteriorating conditions banks may lower those line amounts after issue.  

 
Sandeman said:
I've emailed my banker at WF. Let's see what she says.

My mortgage lender (not WF) has said a cash-out refi comes at a higher rate than a standard one. We are currently at 3.625 (refi'd in December). If we wanted $200k, would we have to take on a higher rate or is there another way of going about it?
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Chadstroma said:
Yes, cash out costs more than a rate/term refi. At 3.625% right now you are best off doing a HELOC. You may want to advance on it right away and deposit the cash in the bank. In the deteriorating conditions banks may lower those line amounts after issue.  
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I respectfully must say the bolded may not be the case. It might be, but takes further delving into.

You should analyze the blended rate of your current 3.625% vs Heloc and compare that to a new first mortgage cash out, since Sandeman is requesting a sizeable cash out it might be best to do a first mortgage cash out, just depends on how much is owed on the first mortgage and rate on the HELOC. Good chance Chad is right here, but I'd do that blended rate comp to make sure.

 
Chadstroma said:
https://www.mbshighway.com/mortgage-crisis.html?fbclid=IwAR1BeDNYdDJSJnKaJZQBrBGJM43UC9NVp59k6S-YsgvhSsxrpSrNGVGXCkc

An excellent run down in understandable language to explain what is happening right now from an industry leader Barry Habib. If you are interested in understanding the mortgage market right now, this is a must read. 
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I met Barry in February in Vegas, went out to eat dinner with him and his group. That guy is awesome and while he did not predict Coronvirus he was pretty adamant we were heading for a major recession.

 
flapgreen said:
How do get get a HELOC? Just call the same lender your home is through? 
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Usually best options are found at a Credit Union or community bank. Failing that out of the bog banks US Bank tends to have the best terms (at least they did when I worked there and again a couple of years ago when I shopped equity options for my own home)

 
menobrown said:
I respectfully must say the bolded may not be the case. It might be, but takes further delving into.

You should analyze the blended rate of your current 3.625% vs Heloc and compare that to a new first mortgage cash out, since Sandeman is requesting a sizeable cash out it might be best to do a first mortgage cash out, just depends on how much is owed on the first mortgage and rate on the HELOC. Good chance Chad is right here, but I'd do that blended rate comp to make sure.
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Agreed. I am eyeballing it and making assumptions on certain numbers. I don't disagree with anything here. 

 
menobrown said:
I met Barry in February in Vegas, went out to eat dinner with him and his group. That guy is awesome and while he did not predict Coronvirus he was pretty adamant we were heading for a major recession.
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Barry is a solid good guy and very smart. He is right more than he is wrong on interest rates and related market info. I respect him greatly. 

I sold about 20% of my stock positions in my IRA based on information from him back in Nov. (Wishing I sold more now- lol) 

No one could call the virus but a recession was coming. This just got us into it fast and furious. 

 
Chadstroma said:
Usually best options are found at a Credit Union or community bank. Failing that out of the bog banks US Bank tends to have the best terms (at least they did when I worked there and again a couple of years ago when I shopped equity options for my own home)
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First Interstate has the best terms now from what I've found but they're a smaller bank and not in every market. They're still going up to 90% LTV and my rate just dropped to 3.15% lol  

 
CR69 said:
First Interstate has the best terms now from what I've found but they're a smaller bank and not in every market. They're still going up to 90% LTV and my rate just dropped to 3.15% lol  
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I'll check them out to see if they're around Nashville.  Also found a couple community banks in a suburb of Nashville that I'll check into. 

 
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flapgreen said:
I'll check them out to see if they're around Nashville.  Also found a couple community banks in a suburb of Nashville that I'll check into. 
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I’m a long time Citibank customer and went with them for my HELOC. Rates seemed the same as others I could easily find, and I liked the convenience of having the HELOC account show up right besides my checking and savings account on Citibank’s website,  so I can easily transfer in or out as needed, and set up auto-transfer payments monthly to pay down a bit extra principal to pay it off a little quicker.  

 
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