If It Ain’t One Thing, It’s Another
What? A problem bigger than COVID-19? You wouldn’t think there could be at this time, but there is always something new making the rounds. Around the middle of August, the mortgage industry was thrown into a frenzy by news that the government was looking to make up losses sustained from the fall out from the pandemic conditions. The Federal Housing Financing Agency (FHFA), regulator of the twins – Fannie Mae and Freddie Mac – notified the industry that they were going to have to pay an extra 0.50% on refinance mortgage loans sold to the twins after September 1. Call it an “adverse-market fee”. Holy mortgage rates! Bit of a tsunami right on top of the barely handled pandemic. One big lender, Mr. Cooper, did a quick calculation and came up with the sum of about $20 million that they would have to pay for those loans already locked but not closing until after that date. Big, big ouchie!
What would that fee mean for the little people? This “adverse market fee” would (of course) be passed on to the consumer in the form of an additional $1,400 added towards the Borrowers loan closing fees. Not a good thing while struggling with pandemic economic woes. Here is an article that came out immediately after the fee announcement.
The mortgage industry hauled out the heavy hitters and petitioned FHFA to reconsider, or at least wait until after the elections to institute this charge or risk having this issue become a political one.
With everyone inundating FHFA with calls and requests, a little over 10 days into the controversy, the agency backed down and agreed to postpone the starting date to December 1 also emphasizing that purchase transactions and refinance transactions under $125,000 were exempt. Article. Kicked that can down the road a short bit but it will still be coming. So for 3 weeks the mortgage industry was totally in an uproar.
Meanwhile, you’ve heard about 1.99 percenters? Yes, United Wholesale Mortgage and some other lenders were making a marketing splash with a 1.99% interest rate offering on a fixed 30 year mortgage. In case your eyes are popping and you are saying, “Hmmmm”, let me bring out the old adage: There Is No Free Lunch. The lower the rate the higher the cost. Are you willing to pay 10K for that 1.99%? Look at it this way: If the loan amount were high, the cost of monthly mortgage savings could even out the extra upfront fees. So, before you jump all in, do the math! How much are you saving each month and when will that extra fee be paid off?
And in case you are tearing your hair out wondering why your refi is still half cooked after all this time on the stove, lenders have to (1) juggle working within the pandemic parameters,(2) deal with the purchase boom, and (3) they are having problems getting appraisals and having appraisal values done on time. If you are doing a refi at a low cost, that means the loan broker may not be making a whole lot of money on your loan and it may get put on the bottom of the pile. Jus’ sayin’..
Enough about the mortgage industry. So what else is happening out there?
Citibank got into a bit of a problem when a wire of $1.5 million to pay interest on a hedge fund ended up being a wire of $175 million. Oops, slip of the fingers on the keyboard. And the hedge fund is not giving it up. So sue me. Which is happening now. I am thinking that person with the slippery fingers is no longer working there.
Chipotle is getting into the clothing industry. Seems like their main food ingredient, the avocado, has more than one use. The avocado pits can be used to die clothing so Chipotle is expanding their product line. So, fresh food and fresh clothing.
Uber and Lyft are facing problems in California as we passed the Independent Contractor Law last year – AB5. The law would have made the 2 biggest companies in the gig economy re-classify their drivers as employees with all the normal benefits. Uber and Lyft responded by putting Proposition 22 on the November ballot that would classify their workers as independent contractors. Now it seems that operating in California may not be an option until Prop 22 is decided. If you are caught standing at a corner with no news of your drive, you will know why.
Tired of looking at your computer screen, the view of your home office wall or kitchen area? Here are two sites for you to change up things:
Swap out your window – https://window-swap.com/
Or drive around another city with even the local radio station to give it some local flavor – https://driveandlisten.herokuapp.com/
I have added two more Escrow Stories from the Trenches to my YouTube Channel. You might find them interesting – one is labeled “Remote On Line Notarizations – Trials and Tribulations” and the other is labeled “Dead Men Tell No Tales”. Yep, straight from the horse’s mouth, er, the horse’s water trench?. Enjoy!
World: “There’s no way we can shut everything down in order to lower emissions, slow climate change, and protect the environment.”
Mother Nature: “Here’s a virus. Practice.”
You Have Questions? We Have Answers!
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