Forbearance Guidelines Updated for Conventional Financing

This week Fannie Mae and Freddie Mac updated guidelines for how soon home owners can obtain a new mortgage if they have entered into a forbearance agreement with their current lender. Most of the focus with this program is that it’s not suppose to impact their credit score. Although the credit score may not be impacted, the credit report reflects that payments were not made on the mortgage. It seems that many home owners are not aware that taking advantage of not having to make mortgage payments will impact their ability to get a new mortgage for refinancing or buying a new home.

Fannie Mae and Freddie Mac offered clarity with their new guidelines this week. If you currently have a conventional mortgage, it is a Fannie Mae or Freddie Mac mortgage. Basically, if you opt for the forbearance program that’s being offered due to covid-19, then you may not be able to get a new mortgage until you have have made three months of on-time mortgage payments. If a borrower has stayed current with their mortgage, they may still be eligible for new mortgage. There may be some variances with this depending on what type of forbearance program you have entered into as well as lender underwriting overlays.

Mortgage servicers really should be making it clear to home owners what the penalties may be should they opt take advantage of forbearance. In fact, in my opinion, borrowers should be provided an easy to understand written disclosure on what their options are, how the forbearance is resolved and what the effects may be afterwards, such as the very likely possibility they will not be able to qualify for a mortgage until they have made three on-time mortgage payments. By the way, the three month time frame is MUCH better than what industry experts were predicting ranging from 12 months to a couple years if treated as a pre-foreclosure.

Bottom line, if covid-19 has impacted your income, as it has for many, and you need help with your mortgage, please contact your mortgage servicer as soon as possible and be sure to ask them what the impacts will be once you enter into forbearance: what happens with the missed mortgage payments (when are the missed payments due), how soon can you obtain your next mortgage to refi or buy a home, etc.

If you are currently employed, you may qualify to refinance now during historic record low rates. I have been helping Washington home owners dramatically drop their mortgage payments and some are taking cash out to eliminate debt or build their savings for these times. Please let me know if I can help you.

Take care and stay safe!

Mortgage Rates at an All Time Low

Freddie Mac’s weekly mortgage rate survey, Prime Mortgage Market Survey (aka PMMS) revealed the lowest mortgage rates since Freddie Mac started tracking interest rates in 1971.

“The size and depth of the secondary mortgage market is helping to keep rates at record lows. These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April,” said Sam Khater, Freddie Mac’s Chief Economist.

Remember, Freddie Mac’s PMMS report is based on mortgage rates from last week. Last week’s rates are old news and no longer available…although with that said, mortgage rates are still extremely low right now

We are open for business and here to help you with your refinance or home buying needs for homes located in Washington state. Please contact me if I can help you! Click here for a no-hassle mortgage rate quote or here to start a loan application.

Some things to Consider before you do Forbearance with your Mortgage

Politicians and the media have made it sound like entering into a forbearance with your mortgage because of the pandemic is something that many Americans are taking advantage…and maybe you should too, right? Well…maybe not. [Read more…]

Governor Jay Inslee clarifies requirements for Loan Officers and Real Estate Agents during the Pandemic

Last Friday, Governor Inslee issued clarification to real estate agents and lenders regarding real estate and mortgage transactions during the corona virus pandemic. Originally, real estate agents were clarified as “non-essential” which caused a bit of an uproar in the real estate industry. [Read more…]

Mortgage Rates at Extremely Low Levels

Freddie Mac’s PMMS report was released this morning showing just how low mortgage interest rates have dropped during the pandemic. Remember, the Prime Mortgage Market Survey’s rates are last week’s news as they are based on an average of mortgage rates from last week.

[Read more…]

Getting a Mortgage During the Coronavirus

What strange times we’re in! Last night, Governor Inslee declared we are in a minimum two week “shelter in place” with only essential businesses allowed to operate, unless you can work from home.

Mortgage companies are currently considered essential and Mortgage Master Service Corporation is open to help you with your mortgage needs. I am currently working from my home office as I navigate mortgage rates that are off the charts! We are still helping people with their refinances and home purchases. [Read more…]

Fed Drops Funds Rate to Zero to 0.25% – how does this impact mortgage rates?

In an unprecedented move, the Fed dropped the Fed Funds rate to 0-0.25% today…it’s Sunday! This is a coordinated effort with several other central banks around the world. This move does NOT mean that mortgage interest rates are 0 – 0.25%. The Fed does NOT directly control mortgage interest rates – however, actions taken by the Fed may impact the direction of mortgage interest rates. [Read more…]

How to Grab a Low Mortgage Rate in a Volatile Market

Lately I’ve felt like I’m sitting in the front row of a roller coaster with the wild swings in mortgage interest rates. Mortgage rates have been at 50 year lows this past week – the lowest levels since Freddie Mac started keeping track with their weekly mortgage survey. This is largely due to fears in the market caused by the coronavirus. The Dow has been taking wild plunges, then will rally only to dip again. Mortgage rates are based on bonds (mortgage backed securities) and when investors are pulling funds from stocks, they will often seek the safety of bonds. We’ve seen that this past week when rates dropped to the lowest levels I have seen in my 20 year career as a Mortgage Professional. We are in uncharted territory. [Read more…]