The Mortgage Blog has documented the recent rapid swings in mortgage interest rates based on COVID-19 economic impacts. Now let’s look at some positive (non-interest rate) news from the mortgage world, specifically regulatory changes resulting from the massive disruption to the world economy.
First of all, Fannie Mae and Freddie Mac will ease their appraisal and employment verification standards, based on a Federal Housing Finance Agency directive. The goal is to “facilitate liquidity in the mortgage market during the coronavirus national emergency.” Appraisal management companies can now use “appraisal alternatives” that reduce the need for appraisers to enter homes “for eligible mortgages.” Appraisers can use desktop appraisals and drive-by appraisals in certain circumstances. Fannie Mae stated these alternatives may be used “when an interior inspection is not feasible because of COVID-19 concerns.”
The second source of good news is from financial regulators working to help borrowers avoid foreclosures. On March 17, Fannie Mae, Freddie Mac, and HUD (FHA’s loan guarantor) announced that they will suspend foreclosures and evictions for 60 days to help borrowers stay in their homes while COVID-19 spreads. The State of New York went further, as Gov. Andrew Cuomo announced that the state will enact a 90-day mortgage relief period. Options for relief include forebearance, which allows borrowers to suspend mortgage payments for up to 12 months due to COVID-19 caused hardship. Other options may include mortgage modifications and “other mortgage payment relief options available based on the borrower’s individual circumstances.”
I find this mortgage-market news encouraging, and hopefully it will reassure people considering a home purchase. Just a reminder if you are thinking about a home purchase – interest rates are at very low levels historically. From a mortgage perspective, now is still a good time to buy a home. If you want to buy a home in the State of Georgia, reach out to me. I promise that Dunwoody Mortgage will deliver outstanding service and will go the extra mile to close your purchase as quickly and with as little hassle as possible.
