Mortgage rate markets are settling in after Federal Reserve intervention created the unintended consequences of higher costs and rates.
Millions of mortgage loans are in forbearance, and loan costs have increased as a result. The Federal Housing Finance Authority moved to limit the industry's risk (and potentially tame costs) by capping the number of payments mortgage servicers will have to make on behalf of their borrowers.
The enhanced risk to lenders has translated not only to higher servicing costs but also to a tightening of guidelines in the case of some lenders' programs.
Housing and Home Financing:
The government entities that back most home loans have temporarily loosened some requirements to accommodate the current social-distancing environment. Drive-by appraisals and delayed appraisals are currently accepted in some cases.
Those in the process of a purchase or refinance should expect some new paperwork at the closing table. Borrowers may be required to sign disclosures attesting they've not just lost their income and do not plan to enter forbearance.
There are alternatives to forbearance, yet for those with no other choice, the time period to apply under the CARES Act has been extended from August 1 through the end of the federally declared emergency period on December 31, 2020.
Remember, the team at New England Home Mortgage are still working hard for you. If you have questions or need assistance, please reach out 860.4262.447. Stay well!