Category Archives: Mortgage Information

Lenders are slowly to offer jumbo mortgages again

Lenders are slowly and selectively starting to underwrite jumbo mortgages again after all but abandoning the market as the pandemic got underway.

Since February 2020, jumbo mortgage originations have plunged 57 percent, according to data from the Mortgage Bankers Association (MBA). https://www.msn.com/en-us/finance/realestate/lenders-are-slowly-starting-to-offer-jumbo-mortgages-again/ar-BB16ESKD

The once-robust market for jumbo loans, and some other types of loans, collapsed at the onset of the pandemic. Lenders worried about the ability of borrowers to repay their loans as unemployment skyrocketed.

“There was no secondary market to purchase these loans and the banks can only hold so many on their balance sheets,” says Mitch Ohlbaum, real estate broker and president of Macoy Capital in Beverly Hills, California. “In fact, there was no secondary market for jumbo loans, non-QM loans, private loans or much of anything to be honest.”

read more at: https://www.msn.com/en-us/finance/realestate/lenders-are-slowly-starting-to-offer-jumbo-mortgages-again/ar-BB16ESKD

Homeowners stopped paying mortgage in record numbers in April

Record unemployment caused by the coronavirus pandemic led to the largest one-month increase in mortgage delinquencies ever recorded. The number of borrowers who stopped paying their home loans spiked by 1.6 million last month, new data show.

Not even during the Great Recession did delinquencies rise this fast. During that time, it took 18 months before there was a single-month increase as large.

The national delinquency rate soared to 6.45 percent in April, up from 3.06 percent in March and three times the previous single-month record set in 2008, according to data released this week by Black Knight, a real estate data and analytics company. The 3.6 million borrowers who are now past due is the most since 2015.

The data represents homeowners who didn’t make a mortgage payment in April, including those who are in forbearance plans. It comes from the company’s loan-level database representing a majority of the national mortgage market.

You only need to look at the job market to understand why so many people aren’t paying their mortgages these days. The U.S. economy shed 20 million jobs in April and the unemployment rate soared to its highest level since the Great Depression as many businesses nationwide shuttered. The impact has been swift and severe: An additional 2.4 million Americans filed jobless claims last week, the Labor Department announced, pushing the nation’s nine-week total past 38 million.

read more at:  https://www.wvgazettemail.com/washington_post/finance/homeowners-stopped-paying-mortgages-in-record-numbers-in-april/article_782bca3e-66f9-59f4-bce9-eae8cf7faa19.html

If Landlords Get Wiped Out, Wall Street Wins, Not Renters

Nobody’s bailing out Connecticut landlord Maribeth Shields,

More than half of the tenants in the 27 low-income apartments she owns in the city of West Haven and its vicinity aren’t paying and there’s nothing she can do about it. The state banned evictions until July and allowed tenants hurt by the pandemic to defer with no penalty.

But Shields can’t pay, either. Her profit last year came to only $24,000, and now she’s behind on $1.2 million in mortgages. Like millions of other U.S. landlords, who owe lenders more than $1 trillion combined, her fate is tied to renters now urgently focused on their own self-preservation.

“My tenants think I’m rich,” Shields says. “They have better cars than me, better nails, and better tax refunds.”
The next housing crisis is here, and this time, it’s about rentals. Across the U.S., landlords and tenants are wrangling over next month’s rent while an approaching avalanche of evictions threatens to bury them both.
To avert a damaging wave of foreclosures like the one that swept the country more than a decade ago, Congress included a provision in the $2.2 trillion rescue package it approved in March that allows homeowners with government-backed mortgages to defer payments for up to a year. But Washington stopped short of offering renters comparable relief on the assumption that those in distress would likely qualify for the $1,200 checks the Treasury began mailing out in April, as well as beefed-up unemployment benefits.