Wednesday, April 8, 2020

Breaking down this week's mortgage news

Here are the latest developments
 ‌ ‌ ‌ 

Better Mortgage Market News 4/8/20

As part of our mission to make homeownership simple, fair and affordable, we're committed to providing the most accurate and up-to-date information available to everyone in our community. Here's what you need to know this week.

  • Economic hardship increases likelihood of default
  • Lenders tighten standards to mitigate risk
  • Title agents struggle to work around county office shutdowns

As unemployment spikes, lending standards tighten

6.65 million people applied for new jobless claims last week, causing lenders to anticipate a higher number of defaults if these economic conditions persist.

To mitigate the risk, many lenders are imposing stricter credit standards. Here's a sample of what that looks like:

  • Wells Fargo adjusted its minimum score requirement to 680 for all government loans (FHA, VA, and USDA)
  • US Bank requires a 680 credit score for FHA, VA, and USDA loans, and 640 for conventional loans
  • LoanDepot is requiring a 620 minimum FICO score for VA and FHA loans with a higher score (660+) for cash-out or streamline refinancing
  • Flagstar is requiring a 640 score for both purchase transactions and non-cash out refinances

Even further, some lenders are preventing borrowers from locking their rates or postponing rate-lock until the loan is cleared to close. This effectively forces borrowers to proceed through the loan process without knowing their rate until days before closing.

As a 100% digital lender, Better Mortgage allows customers to lock rates 24/7. You can finish applying, check your custom rates and lock instantly from home anytime.

Title agents struggle to keep closings on track during lockdown

Title agents, or escrow agents, impacted by coronavirus containment measures now have to work around county office shutdowns to keep closing procedures on track. They've turned to remote signing and recordation to smooth bumpy workflows. The American Land and Title Association reports that, as of April 6, only 11.8% of jurisdictions are open and operating as usual whereas 43.1% are operating in a modified state. Although title insurance companies have begun to offer gap insurance, challenges will remain for businesses not set up for all-digital transactions.

Better's title insurance arm is exploring options for hybrid and remote online notarization options, and there are currently zero counties where Better Mortgage cannot fund a loan due to office closures.

For more on homebuying, homeownership, and how mortgages work, visit our resource center any time.

 
Twitter
 
LinkedIn
 
Facebook
 

120 Broadway, 5th Floor, New York, NY 10271
Better Mortgage Corporation is a direct lender
All rights reserved.  |  NMLS #330511
NMLS Consumer Access
© 2020 Better Mortgage Corporation
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)