Is it the End Of The World (as we know it)?
No, not at all, we have just gone into the TWILIGHT ZONE!!!!! (cue TZ music, please)
From one of my escrow peeps, and probably this made the rounds on social media:
“I was in a long line at 7:45 am today at the grocery store that opened at 8 for seniors only. A young man came from the parking lot and tried to cut in at the front of the line, but an old lady beat him back into the parking lot with her cane. He returned and tried to cut in again but an old man punched him in the gut, then kicked him to the ground and rolled him away. As he approached the line for the 3rd time he said, “If you don’t let me unlock the door, you’ll never get in there.” Hahahaha!
What is this world coming to? Well, here’s a view from behind my locked glass door….
ESCROW SERVICES – Viva Escrow’s position (and the reason why) is in our announcement on: www.vivaescrow.com. Yes, we are an essential service, people are still buying and selling real estate and refinancing, although more on that later. Our business sales have fallen though, as you can imagine and the sale of certain businesses, like restaurants and beauty salons, have come to a standstill.
Working behind closed front doors and hunkered within our own offices without much person-to-person in-office contact is weird. 6 feet outside my room! Call me! (I know I am just next door..) No gathering in the lunchroom, no shooting the breeze at the front desk, just wave at our messengers and FedEx delivery guys from behind the glass. Clients? Stay At Home! We will send the documents to you or through a mobile notary (more on that later).
Treasury Secretary Steve Mnuchin’s press release on March 26th provides a brief description of what “essential financial services” are and what do you know, settlement services are right there. Darn. I guess we need to work. And here I was going to stay at home and clean house.
NOTARY SERVICES – Also included in “essential financial services” are Notary Publics, who perform a very essential service for us settlement agents. We don’t allow people into our office, so how do documents get notarized? Mobile notaries are making a lot of money right now (if they are willing to go to homes).
Besides the standard hand sanitizing and wash before and after, gloves, masks, disinfecting surfaces, separate pens, what are some of the creative ways for a notary to minimize contact with clients while doing a signing? Sign in parking lot, sign on back of car trunk, sign inside home with notary on the outside of the window watching… I am gathering stories. And before you ask the question, no, California does not allow remote online notarizations, so we are out of luck there.
REAL ESTATE SERVICES – Real estate agents were not originally included in “essential financial services”, but that changed when NAR pushed the Dept of Homeland Security CISA to re-classify them on March 28. Even so, my personal viewpoint is that, more than any other industry, real estate agents have the capability of working from home, research and do their showings virtually, sign their offers electronically, and, in general, let their fingers do the walking. Even so, the cautionary words from the California Association of Realtors (C.A.R.) are: no open houses, no caravans to show listings or property inspections. Do everything virtually if possible. I must say my escrow industry is happy because with them still working, we will still be open and we can still keep our doors open, figuratively speaking. No jobs lost yet.
There are certain areas of the real estate industry that have either come to a halt or are feeling more pain. Redfin and Zillow are stopping their iBuyer programs. Realogy is cutting their employees salaries. Compass is laying off 15% of the staff. This all prompted the California Association of Realtors (C.A.R.) and the National Association of Realtors (NAR) to lobby Congress for “forgivable SBA Loans” for their independent contractor members. Their wish was granted and with the new stimulus bill signed into law on March 27th as independent contractors real estate agents may apply for special SBA loans.
MORTGAGE SERVICES – But what about the mortgage industry? They have been crazy, crazy!
At the beginning of March, when the Fed lowered the federal funds rate, mortgage interest rates dropped and refinance transactions jumped over 50% from one week to the next. The Mortgage Bankers Association (MBA) projected the highest volume in eight years and our lives went crazy with new refinances. It was so bad some lenders were not only not advertising their low rates, they were inflating them to stem the tidal wave of mortgage applications that they didn’t have the manpower to handle. And then, two weeks later the coronavirus threat slammed into us and our lives have now gone into uncharted territories. What we worried about at the beginning of the month turned 180 degrees into a brand new tangent.
New mortgage applications have now come to a standstill as everyone tries to figure out if their Borrowers even have jobs. Loan approvals and document drawing are delayed as loan staff are cut or forced to work from home. As an example, here is a statement from loanDepot shared on a mortgage blog a week or so ago:
“Due to extraordinary market disruption, loanDepot Wholesale has temporarily suspended all Jumbo Advantage REFINANCE transactions, effective immediately. Any transactions that have closed/signed may proceed with no additional restrictions. Any refinance transaction that has documents out, but has not signed, has been temporarily suspended and will need to be reworked into another viable program.”
Also, they are cautioning their underwriters to ensure clients’ business viability, whether their business class is listed as a “critical infrastructure industry” by the Dept of Homeland Security and that business continuity will not be affected by COVID-19. Ouch. I think many people and businesses, particularly on the lower half of the economic spectrum, will be in trouble.
LENDER SERVICES AND THE LAST DOMINO IN THE STACK– CA Governor Newsom ordered non-essentials to stay at home. Businesses were forced to shut down. Jobs were lost. Layoffs occurred. 3.3 million people filed for unemployment. April 1 will be the date to watch. Will rents be paid? Will mortgage payments be made?
Many states, California included, are putting a temporary ban on evictions if non payment of rent is due to the coronavirus. Many Lenders are also placing a hold on foreclosures. Even the stimulus package allows homeowners the deferment of mortgage payments for 12 months. Now, without payments as their income, Lenders will be facing another economic crisis, one that may be much worse than the 2008 one. Once again, lending institutions will need the Federal Reserve to shore them up with their own stimulus package.
Isn’t it great that the U.S. can just print money whenever they need with just our nation’s economic health and wellbeing as backing?
Now, if only we could get Secretary Mnuchin to declare hair and nail salons essential businesses also!
This has been a long three weeks. I have been updating my stories for this blog daily, but things will change between now and when the final goes out to you. So just a heads up, there may be old info. These last few Fridays I was actually looking forward to being incarcerated at home for 2 days. Course, all I do is hunch over the computer at home instead of the office to digest the bad news online. I need to find some happy news to cheer me up.
And I did! For the funny of this month, here is the viral video that made it across the world – a Political Science professor in South Korea dealing with his kids while conducting a video interview at home. Ellen DeGeneres really does a great job showing this video off.
For those of you who do work at home, does your work area look anything like this? How do you guys do it? Thank you to Banner Bank, with whom we have an excellent banking and mortgage relationship with, for allowing us to share.
If you have 5 minutes, a video from Mythbusters provided by my conscientious staff on how easily those dratted germs and viruses get spread.
If you want to see something scary, use this Johns Hopkins site to see the COVID-19 numbers. I am not even going to include the National Debt Clock. I shudder to think how fast that will be changing. Maybe it will run out of number spacing.
So that’s a view from behind my glass door. Stay safe, stay healthy, stay calm, stay at home.
During these difficult times Viva Escrow remains open, as we are considered an “essential business”, but we are practicing “Shelter At Office”. Therefore we have closed our doors to incoming clients and are using mobile notaries to help you with the notarization of required documents at your home. If you have questions or concerns, please call us.
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.