COVID 19 Lending Changes You Should Know

Welcome to the day-by-day  world of real estate and lending, brought to you by the Coronavirus.  The unemployment numbers hit 15% and are expected to be at 19% by the end of the quarter.  Forward projections have no real insight as to how long it will last, the only thing we can do is hold on see what comes.  There have been some major adjustments in the lending industry that are going to affect thousands (if not millions) of people.

Lending has tightened up

Just two weeks ago we could do a loan if you had a 580 credit score.  Now the minimum is 620.  It’s becoming harder to take more than $50,000 cash out of your house if you want to refinance and it’s become difficult to verify employment as many people are now working from home and/or being laid off.


No One Is Buying FHA Loans

It’s been very difficult to do FHA loans because no one is buying them right now.  Lenders have no outlet in which to sell these loans so they’ve raised the rates in an effort to slow people down.  They do not want to hold these loans on their books for an indefinite amount of time.

Verification Of Employments Are Hard To Get

Traditionally a lender would verify a buyer is still employed within 10 days of closing.  That timeline has been shifted to just 1 day.  They are rushing to get verification of employment within 24 hours of signing paperwork, this has clogged up the process and made it very hard to close in a timely manner.  It’s also frustrated Human Resource departments and payroll specialists.


What We Are Doing To Help

We’re adjusting day by day, but a couple things we are doing to prevent delays is preparing our clients for this change.  In early discussions we are talking to them, figuring out the stability of their jobs and who we can contact quickly to verify they are employed still.  If we can gather the right information we expect little , or no delays in normal purchase closings.

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Justin Scott

NMLS 8758581

Executive Mortgage