All Encompassing Mortgage and Real Estate Thread

[Gladeite 375]

I hear a lot of talk in the industry about appraisals and assumptions/statements.  Probably going to exterior only inspections/2055s very soon.  Appraisals to include statements that estimate of value does not take into consideration the effect of Covid-19 since there is no market data available to demonstrate any significant change in value.  I know there are talks going on w/ FNMA/FHLMC, BofA, Wells, Citi, etc... about purchasing mortgages during this time period.  Underwriting will require re-verifying employment/income before closing.

When the dust settles in 30 to 60 days, there will be a dramatic shift in demand/supply.  Demand will go down and supply will linger/grow.  Prices will drop.  To what, I have no idea and if I knew, I would be famous and not perusing Surly message boards.  Best guess is immediate 10%, languishing to 20-25% over the rest of the year.  Every segment will be hit.  

[Your Mom 4886]

30-60 days for the dust to settle seems unrealistically optimistic to me.  Hope I’m wrong.  

[Gil Bang 26125]

our state association has advised us to shut down completely.   No showings, no open houses, no listing appointments.  If you have a listing, they've invented a "Hold" status for the MLS.

[Wulaw Horn 19343]

2 hours ago, Gladeite said:

I hear a lot of talk in the industry about appraisals and assumptions/statements.  Probably going to exterior only inspections/2055s very soon.  Appraisals to include statements that estimate of value does not take into consideration the effect of Covid-19 since there is no market data available to demonstrate any significant change in value.  I know there are talks going on w/ FNMA/FHLMC, BofA, Wells, Citi, etc... about purchasing mortgages during this time period.  Underwriting will require re-verifying employment/income before closing.

When the dust settles in 30 to 60 days, there will be a dramatic shift in demand/supply.  Demand will go down and supply will linger/grow.  Prices will drop.  To what, I have no idea and if I knew, I would be famous and not perusing Surly message boards.  Best guess is immediate 10%, languishing to 20-25% over the rest of the year.  Every segment will be hit.  

This seems reasonable to me. 

[UTPhil2006 3839]

1 hour ago, Gil Bang said:

our state association has advised us to shut down completely.   No showings, no open houses, no listing appointments.  If you have a listing, they've invented a "Hold" status for the MLS.

Damn. We just got beat out twice this week with two separate customers on Multiple offer situations so seems pretty strong here 

[LebongJames 1827]

We just accepted an offer here in Austin for April close. The actually being able to close probably scares me the most

[bluto 4947]

We just accepted an offer here in Austin for April close. The actually being able to close probably scares me the most

Same, however the pressure on buyers to get it done before appraisals fall through or lenders tighten up is fairly strong too.

[Wulaw Horn 19343]

1 hour ago, LebongJames said:

We just accepted an offer here in Austin for April close. The actually being able to close probably scares me the most

Yep. I’ve got 36 (I think) deals on my board on the mortgage side and 103 on the title side. Will be interested to see if and when we get a total shut down. We are totally and completely work from home without a problem- but if the appraisers can’t go out or the county courthouses shut down so nothing can be recorded there’s pretty much nothing to do in the business other than to hope/pray locks will be honored when the market starts back up. 

[Wulaw Horn 19343]

1 hour ago, UTPhil2006 said:

Damn. We just got beat out twice this week with two separate customers on Multiple offer situations so seems pretty strong here 

Same here. I’m literally shocked at how many people are willing to go out and buy and sell in these conditions. I’d mentally projected zero closings from mid April to mid May (resale anyway) but I’ve got 5 apps in yesterday and today with 3 of them writing offers and the other 2 waiting for us to give a thumbs up for them to be able to write. 

Im completely shocked at how much activity there is here for us. I couldn’t imagine people going out and buying houses with schools shut down, work from home, oil cratering and staring a recession dead in the eye. 

[Upgrayedd 5830]

15 hours ago, Wulaw Horn said:

Same here. I’m literally shocked at how many people are willing to go out and buy and sell in these conditions. I’d mentally projected zero closings from mid April to mid May (resale anyway) but I’ve got 5 apps in yesterday and today with 3 of them writing offers and the other 2 waiting for us to give a thumbs up for them to be able to write. 

Im completely shocked at how much activity there is here for us. I couldn’t imagine people going out and buying houses with schools shut down, work from home, oil cratering and staring a recession dead in the eye. 

We got locked in at 3.375% a number of weeks ago and went under contract three weeks ago on a condo that has been part of our relocation plan.  Don't have to sell an existing residence.  Been trying to figure out whether to stick with it (I can always find a way to crater a deal) by balancing higher rates down the road vs. a 20% (?) decline in the value of properties in the next few months . . .  

[Gladeite 375]

FNMA/FHLMC just released guidance.  Desktop appraisals and 2055 exterior only appraisals are now approved as a temporary measure.  This will help ease some of the constriction in the mortgage pathway.  

[bluto 4947]

So you’re saying they are telling appraisers to just ‘approve’ shit if it’s even remotely reasonable to keep deals going?

[Dnaguy 12382]

18 minutes ago, Gladeite said:

FNMA/FHLMC just released guidance.  Desktop appraisals and 2055 exterior only appraisals are now approved as a temporary measure.  This will help ease some of the constriction in the mortgage pathway.  

Can you de-code this for the dumbs who don’t do this for a living?

i am one of those dumbs.

[Chewbacca 7808]

Can you de-code this for the dumbs who don’t do this for a living?
i am one of those dumbs.

Appraisers don't have to come inside houses.

[Dnaguy 12382]

1 minute ago, Chewbacca said:

29 minutes ago, Dnaguy said:

Can you de-code this for the dumbs who don’t do this for a living?
i am one of those dumbs.

Appraisers don't have to come inside houses.

Gross.

why would they jizz in my house to begin with?

[Wulaw Horn 19343]

Just now, Dnaguy said:

Gross.

why would they jizz in my house to begin with?

I mean- if the pizza guy and cable guy can, why not the appraiser? 

[Dnaguy 12382]

Just now, Wulaw Horn said:

I mean- if the pizza guy and cable guy can, why not the appraiser? 

 

“Uhhh. Did someone order a real asstate appraisal

I need to get all up inside and around back.

That’s why the bank sent me. I’m an expert”

 

[BabaYaga 15428]

22 hours ago, Gladeite said:

I hear a lot of talk in the industry about appraisals and assumptions/statements.  Probably going to exterior only inspections/2055s very soon.  Appraisals to include statements that estimate of value does not take into consideration the effect of Covid-19 since there is no market data available to demonstrate any significant change in value.  

FNMA sent the communication.  This is in play now.  

[aggie08 21611]

"Are those hard wood floors, or are you just happy to see me?"

[UT_OB1 2229]

1 hour ago, Gladeite said:

FNMA/FHLMC just released guidance.  Desktop appraisals and 2055 exterior only appraisals are now approved as a temporary measure.  This will help ease some of the constriction in the mortgage pathway.  

Yeah, so are you dating someone can just fix up the exterior for a rehab, say F it on the disaster on the inside, and get it ReFi’d because they claim they gutted and redid everything?!  

[Chewbacca 7808]

27 minutes ago, Dnaguy said:

Gross.

why would they jizz in my house to begin with?

Do you want the loan or not?

[Dnaguy 12382]

18 minutes ago, Chewbacca said:

Do you want the loan or not?

This is the last time I refinance with Goldman Sacks.

[UTPhil2006 3839]

1 minute ago, Dnaguy said:

This is the last time I refinance with Goldman Sacks.

User name checks out.

[MC Fresh Breath 4074]

18 hours ago, Wulaw Horn said:

Same here. I’m literally shocked at how many people are willing to go out and buy and sell in these conditions. I’d mentally projected zero closings from mid April to mid May (resale anyway) but I’ve got 5 apps in yesterday and today with 3 of them writing offers and the other 2 waiting for us to give a thumbs up for them to be able to write. 

Im completely shocked at how much activity there is here for us. I couldn’t imagine people going out and buying houses with schools shut down, work from home, oil cratering and staring a recession dead in the eye. 

Folks like me feel a bit trapped.  I stand to lose a good amount of earnest money if I back out, although I think maybe I could claim something in the inspection report(?) and back out and keep it.

That said, the area I'm in is as hot as Austin, possibly more.  Nobody knows what interest rates are going to do, nobody knows what inventory is going to be in the next 6-12 months, e.t.c.

[3adays 454]

Three weeks ago,  we signed a deal with a builder to construct a new home in the Austin area. It’s in a new neighborhood, so I’m nervous that if prices start to dramatically drop we’re stuck  having overpaid. I can always pull out and lose the earnest money and any we’ve paid for design upgrades. Is anyone in or have been in a similar situation? 

[msucolt45 4177]

Mc Fresh,

I made an offer on a home this AM and there is a Covid-19 Addendum that Texas has recently adopted. Losing my earnest money was one of my main concerns with the unknown thanks to this crisis.

Ask your realtor to get that put into your offer for protection.

[MC Fresh Breath 4074]

Thanks, I'm not sure what that entails and if it covers 'buyer got cold feet due to impending Great Depression.'

 

[Gladeite 375]

4 hours ago, Dnaguy said:

Can you de-code this for the dumbs who don’t do this for a living?

i am one of those dumbs.

With the virus scare, appraisal management companies(who control most residential appraisals) became worried about the liability of their appraisers entering homes and potentially getting sick.  Appraisals ground to a halt last week, which results in sales not getting thru underwriting, not closing, etc...

In order to help relieve the bottleneck, appraisal management leaders, FNMA/FHLMC and secondary lenders came up with a solution.  Allow appraisers to complete exterior only inspections, supported by publicly available data regarding the home being appraised and viewing the comparable sales.  In areas that are shelter in place, the appraiser can complete the assignment from his "desk" using publicly available data for the home and that of the comparable sales.  

There are all sorts of qualifiers and assumptions/limiting conditions.  It is not perfect but it accomplishes the need to keep the mortgage/real estate market alive.  Without it, the residential market would tank.

 

 

[UTPhil2006 3839]

On 3/19/2020 at 3:19 PM, UTPhil2006 said:

Back down .14 to 1.11 

Closed at 0.93 Friday, closed at 0.76 today

[Gil Bang 26125]

2 hours ago, msucolt45 said:

Mc Fresh,

I made an offer on a home this AM and there is a Covid-19 Addendum that Texas has recently adopted. Losing my earnest money was one of my main concerns with the unknown thanks to this crisis.

Ask your realtor to get that put into your offer for protection.

CA adopted one last week.  

[Dnaguy 12382]

37 minutes ago, Gladeite said:

With the virus scare, appraisal management companies(who control most residential appraisals) became worried about the liability of their appraisers entering homes and potentially getting sick.  Appraisals ground to a halt last week, which results in sales not getting thru underwriting, not closing, etc...

In order to help relieve the bottleneck, appraisal management leaders, FNMA/FHLMC and secondary lenders came up with a solution.  Allow appraisers to complete exterior only inspections, supported by publicly available data regarding the home being appraised and viewing the comparable sales.  In areas that are shelter in place, the appraiser can complete the assignment from his "desk" using publicly available data for the home and that of the comparable sales.  

There are all sorts of qualifiers and assumptions/limiting conditions.  It is not perfect but it accomplishes the need to keep the mortgage/real estate market alive.  Without it, the residential market would tank.

 

 

So if you have done significant Renovations I guess you get screwed 

[msucolt45 4177]

Mc Fresh,

It will apply for reduced work (income) in order to purchase. That’s the first out, but if home values depreciated more than say 20% in the next week, I’d lean on it too.

Just letting you know that there is an out besides “cold feet”.

[msucolt45 4177]

[Gladeite 375]

4 minutes ago, Dnaguy said:

So if you have done significant Renovations I guess you get screwed 

 I don't think so.  For purchases that are listed in MLS, there will be 3rd party(realtor) input into MLS which will have a narrative description and photos.   For refi's, a contract describing scope of work from the contractor, receipts or work done, etc... will suffice.  Appraisers are going to have subject hypotheticals that they work under and underwriting will give the final approval.

[msucolt45 4177]

Item B protects your Earnest Money.

[Dnaguy 12382]

10 minutes ago, Gladeite said:

 I don't think so.  For purchases that are listed in MLS, there will be 3rd party(realtor) input into MLS which will have a narrative description and photos.   For refi's, a contract describing scope of work from the contractor, receipts or work done, etc... will suffice.  Appraisers are going to have subject hypotheticals that they work under and underwriting will give the final approval.

Yeah that’s assuming you did it with permits ... and contracts. That junk is for do-gooders. I try and get more bang for my buck. 
oh well. You live and learn.

[Wulaw Horn 19343]

5 hours ago, MC Fresh Breath said:

Folks like me feel a bit trapped.  I stand to lose a good amount of earnest money if I back out, although I think maybe I could claim something in the inspection report(?) and back out and keep it.

That said, the area I'm in is as hot as Austin, possibly more.  Nobody knows what interest rates are going to do, nobody knows what inventory is going to be in the next 6-12 months, e.t.c.

If you keep your job and plan on staying in the house long term everything is hunky dory. I’m not saying don’t go buy a house- I’m saying demand is higher right now than I’d have expected. 

[bluto 4947]

We took a hard stance in negotiating with the buyer on my house about post contract out of pocket expenses not happening.... told my realtor today that anything within my power is gonna get the damn deal done.

[MC Fresh Breath 4074]

1 hour ago, Wulaw Horn said:

If you keep your job and plan on staying in the house long term everything is hunky dory. I’m not saying don’t go buy a house- I’m saying demand is higher right now than I’d have expected. 

 

Thank you.   I overall lean this way, then daily have mini panic attacks as all the bad economic news rolls in.   And thanks to all for tolerating my expression of those on this mainly professional thread.

 

[Dbeasy 15296]

We took a hard stance in negotiating with the buyer on my house about post contract out of pocket expenses not happening.... told my realtor today that anything within my power is gonna get the damn deal done.

And how did you do that exactly? Just tell them verbally? Because if it’s just verbal, they will likely still try to get you to pay for repairs under the hope that you will be afraid of having to start the process over again.

[Wulaw Horn 19343]

20 minutes ago, Dbeasy said:

 

And how did you do that exactly? Just tell them verbally? Because if it’s just verbal, they will likely still try to get you to pay for repairs under the hope that you will be afraid of having to start the process over again.

 

Doesn’t sound like it matters as he’s decided he’s going to renegotiate and cave to anything buyer asks for within reason. Which is the smart play in this market imo. 

[bluto 4947]

And how did you do that exactly? Just tell them verbally? Because if it’s just verbal, they will likely still try to get you to pay for repairs under the hope that you will be afraid of having to start the process over again.

Just a ‘sternly worded (verbal) letter’ and I’m fully aware... so long as I can get it closed I’ll take it.

[Hmbre97 6333]

Am I an asshole for hoping this results in a pullback of the housing market? I've been on the sidelines for almost 3 years now trying to play catch up after my divorce while housing significantly outpaces my wage growth. Shit has gone stupid the last 5-6 years.

[Hefeweizen 5362]

6 hours ago, Hmbre97 said:

Am I an asshole for hoping this results in a pullback of the housing market? I've been on the sidelines for almost 3 years now trying to play catch up after my divorce while housing significantly outpaces my wage growth. Shit has gone stupid the last 5-6 years.

It may pull back existing housing to an extent.  New housing is not  going to pull back unless your market is overbuilt.

[BradInATX 9208]

What do we think the shelter in place is going to do to the whole process of selling a house? We had planned to list on April 1 since last winter, and are still plowing ahead as if that's happening, but I'm getting skeptical. Is there any chance we'll actually end up seeing the whole process through? In a shelter in place which is rumored coming to Austin today, would people even be able to come look at the house?

Edited March 24, 2020 by BradInATX

[closetohumping 17577]

Was pretty close to buying last week but couldn’t come to an agreement.  Now I’m kind of glad o waited though it looks like the market I want to be in , west Seattle, is still hot.  
 

 

 

I was in negotiations for a new build and was just about ready when they voluntarily drop the price 10%.  I told my realtor to ask for more off and to throw in the remaining appliances.  Realtor was appalled saying it would be insulting and that we should go over ask just in case it was a competitive situation.  I asked why is it a competitive situation considering they dropped it fifty k?

 

realtor eventually does as I ask and there’s some back and forth. Two hours later realtor tells me “they got full ask from another buyer.   Any other units you want there?”   Theee hours later “oh uhm the other side backed out.   Would you like to make an offer?l”

 

that was about ten days ago.  Unit is still available. 

Edited March 24, 2020 by closetohumping

[UTPhil2006 3839]

30 minutes ago, BradInATX said:

What do we think the shelter in place is going to do to the whole process of selling a house? We had planned to list on April 1 since last winter, and are still plowing ahead as if that's happening, but I'm getting skeptical. Is there any chance we'll actually end up seeing the whole process through? In a shelter in place which is rumored coming to Austin today, would people even be able to come look at the house?

It would be essential to business, so I would assume so.  I saw that Twelve Rivers Realty is setting up a completely virtual beginning to end thing (most of which is still on the mortgage company), with virtual tours, e-closings, etc.  I don't know how feasible it's going to be as I don't know a lot of people that wouldn't buy without having been inside the home.  This whole market/current situation is unprecedented and unique, so there really is no solid advice.  I'd think that if you had a good, think outside the box realtor it is doable, especially in Austin where the market is still great.  Facetiming, Skype, etc with buyers, virtual tours, Zillow allows you to do a video tour you/your realtor can upload, little things like that can go a long way in this weird process we are in right now.

[Gladeite 375]

My best guess would be to put off listing until after the shelter in place/restricted business is lifted.  The market is paralyzed with fear at the present time.  ABoR has put out no live showings, no open houses, etc... until further notice.  This has to disrupt the buying/selling cycle as we know it.  Many potential and current buyers are now out of the market due to layoffs, oil cratering, portfolio losses and general uncertainty.   The mortgage industry is in knots, navigating thru unchartered water.  They know they have to, but no-one wants to buy a loan in which the collateral value has a very good chance of declining.

The elected officials who have shut down the U.S. economy will be quickly learning about unintended consequences.  

If there was a deadline/ measurement scale of declining cases to let the American people know when they can get back to work and let business owners plan to recover, there would be a little more clarity about what to do next.  Until then, nothing is going to happen.  

If people have to buy/sell now, it will be done virtually from start to finish.  This may be come more normalized, but it is just starting out.  Expect a few hiccups along the learning curve.  

 

[closetohumping 17577]

As of right now,in Seattle I’m seeing quite a bit of price drops but the recession proof area , west Seattle, no drop. 

[Rusty Shackelford 414]

So it looks like MBS are up while 10 yr bonds are down (usually move in tandem)  It will be interesting to see which one wins out on the effect to mortgage rates today.