November 4, 2020, Day 1 after the 2020 Elections
Well, we are coming down to the last stretch now..
Elections – Yes! Finally done, but now it’s nail biting time as we wait and wait and wait for results (as of typing time)
Pandemic – Noooooo
Year end holidays? Yesssss!
But most importantly, the AMRF – Nooooo
What is AMRF?
Glad you asked. I reported on this in my September news blog This is the “Adverse Market Refinance Fee”. So, FHFA decided that the loan originators were making too much money and the profit was just not passed on to Fannie Mae and Freddie Mac down the line (yeah, right, see below). A 50 basis points (.50%) have been added to the fees that they collect from the loan originators to take their loan. The AMRF starting date was extended to loans sold to the twin agencies on or after December 1, 2020.
However, Fannie did report that their net income rose from $2.5 billion in 2nd quarter to $4.2 billion in 3rd quarter. Freddie’s income rose $1 billion. But, the AMRF will help with “pandemic losses”. Greed, anyone? Here is an opinion article which gets it right in the nutshell.
What does this greed mean for the consumer? The Chinese have a saying, “to get more wool you have to go to the sheep”. This .50% wool will have to come from the consumer sheep. Just add it to the loan points that they pay, starting as early as loans with rates locked in around the middle of September. Come November, will there will be a mad rush to close and sell the loans before Dec. 1? If so, escrow officers and loan processors, look for a miserable Thanksgiving!
Are they making too much money?
United Wholesale Mortgage, in their 3rd quarter earnings report stated that they closed $54 billion in loans just this 3rd quarter, an 80% increase from the same quarter last year and they made net income of $1.45 billion, just a little more than $198 million for the same period last year. For this pandemic year up to date they generated $128 billion. Unbelievable. So, of course, it is time to really make some money and go public.
Will it last?
Will low mortgage rates last? What do the pundits say about 2021? The Mortgage Bankers Association says, “Nope”. The low rates this year were a response to the exigencies of the pandemic and a failing economy. However, it will not be sustainable if job losses continue on and there is no end to the pandemic that is causing all the small community businesses to shut down. There are other issues, too, for instance, the national debt, the role the Fed will play in buying mortgage backed securities, and, of course the AMRF. Here is another article with 5 reasons why if you are scratching your head. Yes, I know, this is all over my head, really, but the hope is that we will get a break from all the refi and sale madness so that we can go home and see our families again.
But how is the housing industry doing?
The luxury homes market is having no problems, if that is what you are asking. Sure, what is termed “luxury” may differ from area to area, but the lesson here is that if you have the dough, you can make your cake and eat it till you are stuffed. The next step down are medium priced homes and they are selling, thank goodness, because that’s what is keeping us busy right now. Here is a nice little article from Redfin, with stats (don’t you just love stats?) to show us where we are on those colorful graphs.
What types of homes are selling?
I mentioned last month that I am not a fan of handling the sale of a home that is part of an HOA. Those management companies clearly are out to make money and getting them to respond in a timely manner is difficult. Perhaps they are all working from home and phone calls and emails are hit and miss. But, I digress.
Last month I posted a few homes that I found ….. Interesting… and look! Here are some more!
- A home with a Christmas village in the basement – makes me feel like I am visiting some hotel in Las Vegas
- I am a Star Trek and Star Wars fan, but I don’t know if I could eat in a spaceship themed dining room?
- How about a castle? I understand Glenborrodale Castle (love, love, love!) is for sale for £3.75 or almost $4M. Cheap! And if you like looking at castles for sale, here is a website: www.Castleist.com
So, now you know what I do after I get off from work. I am an online lookie-loo.
And a public service announcement
To all of you who have the distinction of being able to work from home, please be careful of your practices when working remotely. Here are 8 best practices from CI Security. I bring this up because just a week or so ago there was a headline news that a ransomware threat was aimed at US hospitals. Having gone through our own ransomware drama a couple years ago, I cannot emphasize how traumatic it can be.
Finally, my funny(ies) for the month
I don’t have a Twitter account, but apparently many people do and some post some really Tweety stuff on it (okay, not talking about Mr. President). So, this month, let me see if I can ask others to generate a laugh out of you. Welcome to the “29 Most Mind-Meltingly Dumb Posts on Twitter” from BuzzFeed. I can’t decide if #7 or #8 takes the cake. Or maybe #10. Or maybe #20. Goodness, I have read these a few times and I still can’t stop laughing.
In case you have not been keeping count:
22 days to Thanksgiving
50 days to Christmas
I know, right?
You Have Questions? We Have Answers!
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.
Info @ VivaEscrow.com