Uh oh. Only 3 weeks to Christmas! That means only 1 week to find something and another 2 weeks to try to get it delivered on time!
Early Christmas! Well, Christmas came early for some people as the Fannie and Freddie twins have increased conforming loan limits to $548,250 and $822,375 for high end areas. Now, it would be even better if there was inventory available to take advantage of this now. With the pandemic and lockdowns and the elections unrest, people were/are holding back on putting their property on the market. What does come up is scooped up immediately. Here’s the status of the market in one phrase- – easy to sell, hard to buy.
November/December have been traditionally the hardest months for the title, escrow and lending industries to go through as transactions are compressed so that they either are forced to close before Thanksgiving, before Christmas or before the upcoming new year. This year, with the low interest rates, it is even worse. Everyone who is predominantly on commission is pushing to get their deals closed so that they have money for the holidays; whereas those who are predominantly salaried (mortgage processors, underwriters, title staff, escrow staff) are overwhelmed and under pressure to get those deals done. I like to slip a small reminder to all my clients: This is the season of appreciation and thankfulness; show your work partners how much you appreciate them! You can’t get your deal done without their hard work!
HOW BUSY IS BUSY? When the Fed Ex pickup guy starts to complain about sore muscles. 95% of our clients’ signed refinance or purchase loan documents are packaged and sent out through FedEx. Each set of loan docs is about 100 pages. On any given day these last 3 months the average was 15 packages in our pick up area. One day we had 30. That’s just us. I have heard of a Title Company escrow officer who said her escrow unit had 70 loan documents to package one day. That way surpasses “busy”; it is overwhelming and we are fast approaching burnout.
PPP? EIDL? Doing an escrow transaction on a business during the pandemic can be nerve wracking: I closed escrow on a small restaurant business two months ago. A month after it closed, the Buyer and I were shocked when the Buyer received notification from the SBA that the first payment for the Seller’s EIDL (Economic Injury Disaster Loan) would be coming due next year. The notification came to the business location under the business name which now belonged to the Buyer. A Search at the Secretary of State’s office showed no new filings of liens. So what should my Buyer do? If the Seller does not pay, will the Buyer be stuck with it? If an EIDL loan was taken out, was a PPP (Paycheck Protection Program) loan also taken out? This becomes a huge issue when handling a sale of a business during the pandemic times. Without the Seller telling us, how would we know that there are outstanding liens, especially if they are not filed at the State like a regular loan? Will the Seller submit the proper paperwork AFTER closing to get the loans paid off or forgiven? Or will the Buyer be stuck with the loans as the Seller says “so long, farewell”? These are brand new issues derived from the pandemic and its stimulus, and we are in foggy territory now.
Peeking at 2021. Thank goodness the elections drama has subsided. My gut feeling is that with a new Administration being set up, and with the promise of vaccines coming soon, our economy will now stabilize and start going up. Not that it hasn’t yet. Not only has the stock market hit the highest ceiling, but bitcoin jumped in one month from $13,000 to $19,000. But REAL stability can only be found when everyone can go back to work, more shuttered businesses are opened and unemployment is reduced drastically. Two stratas have emerged from the pandemic economy: the “haves-and-we-are-doing-very-well”, and the “have-nots-no-employment-need-desperate-help”. This is one of the reasons why this second lockdown in California is so bitterly contested – there are too many have-nots who NEED to work to survive.
Acronyms we can live without. But what would be the fun in life?
FHFA – Federal Housing Financing Agency. In charge of the twins, Fannie and Freddie. They are greedy. They want and are getting an “AMRF” added to almost all refinance loans sold to the twins starting 12/1.
AMRF – Adverse Market Refinance Fee – that 0.50% fee added to refi loans over $125,000
CCPA – California Consumer Protection Act of 2018 – Protecting our privacy!
CPRA – California Privacy Rights Act of 2020 – CCPA version 2
PIGS – The quartet of Portugal, Italy, Greece, Spain and their economic woes
FANG (stocks) – Facebook, Amazon, Netflix, Google (parent is Alphabet). You own their stocks, you could be set for life
RON – Remote Online Notarization – when the document signer and notary public are miles apart and everything is done via the internet.
TED (talks) – a video on all sorts of topics, created from the technology-entertainment-design conference and available for free!
NGO – Non-governmental organizations which promote social, environmental and human advocacy rights
GSE – Government sponsored enterprises financial services corporations. Example Fannie Mae, Freddie Mac, Sallie Mae…
Funny for the month:
As we look at all the tech deals on Black Friday (Saturday, Sunday, Monday, Tuesday….) let’s hark back to tech marketing ads from a few decades back. A walk down memory lane which Millennials and Gen X, Gen Z have no idea. #19 is a 10 megabyte hard drive for $3,500…. #21 is a cellphone for $895, big as a brick and all it does is call.
Next edition – HAPPY 2021!!!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com
My YouTube Offering for the month: