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re: Realistic outlook for the real estate market?
Posted on 4/13/20 at 5:11 pm to ItNeverRains
Posted on 4/13/20 at 5:11 pm to ItNeverRains
quote:
The tighter the banks get the harder it will be hit
Why would the banks tighten up? Prime is at the lowest it’s been. Prices may drop because of demand but I don’t see banks stopping lending.
Posted on 4/13/20 at 5:37 pm to BigPerm30
Hard to provide proof of income when you are furloughed or laid off.
Posted on 4/13/20 at 6:51 pm to BigPerm30
quote:
Why would the banks tighten up? Prime is at the lowest it’s been. Prices may drop because of demand but I don’t see banks stopping lending
They already have. They always have, always will when there is uncertainty. Wells Fargo and Chase are out of the secondary market with regards to jumbo.
From My Wells LO on a product for my client... “Wells determined that to keep the low jumbo loan rates, they did not want to let the brokers and such originate out jumbo loans. It’s good for me really. For your exact loan it’s 3.375 right now. So slightly higher than what your client is getting”
Posted on 4/13/20 at 9:48 pm to BigPerm30
Worried about people not being able to pay their mortgage. Has nothing to do with rates.
Posted on 4/14/20 at 4:16 pm to BigPerm30
quote:
Why would the banks tighten up? Prime is at the lowest it’s been. Prices may drop because of demand but I don’t see banks stopping lending.
There is a massive liquidity crisis going on for non-bank servicers who make up over 60% of the market.
The non-bank lender servicers are still responsible for paying their investors for the loans they are holding. Well when states and local governments institute foreclosure and eviction prohibitions for a month to six months well those non-bank servicers don't have the cash on hand to satisfy the their investors. This in turn is creating a massive panic that many of these non-bank lenders are now overleveraged.
Imagine if just these companies: Quicken, Freedom, loanDepot, Mr. Cooper, Roundpoint, and Carrington all went belly up?
This is why the market is freezing up and loans are tightening harder and harder. Chase just said their worst case scenario of credit losses this year might be $38 billion!
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