Mortgage Blog

A letter to my client

March 28th, 2020 3:56 PM by Eric Fang

One client emailed me for the rates this morning, so I replied with the following:
Glad to hear from you.
Let me introduce something about the industry.
First the Fed lower the Fed rate, the mortgage rate lower, then lender got lots of business.
Then Conora Virus came, and the industry has limited bandwidth for the shelter-in-home, 
and to add salt to the wound, the appraisers did not want to go out for the appraisal, and notary persons do not want to sign.
And the lenders decided to increase the rate, so no more applications to their pipeline. They want to clear their locked pipeline first.
So that's why the rate is much higher than the rates 3-4 weeks ago.
And to get matters worse, normally insurance companies and the retirement funds are other sources for the loan. Because of the selloff from the stock market, the industry saw the liquidity problems. There are not enough money  for the loans now. So some programs closed, first non-qm loans(not a lot of people use them), then jumbo loans,
and recently conforming ARM loans.
And lenders will not allow us to lock the rate until the loan is approved.

So what should we proceed from here?

We will start the process, target a rate you would like to have, and if we think that rate is doable, then let's proceed the process. Once the market improves, then we will lock the rate.
Will the market rate improve? Yes, it will. But we will need Fed's help. Yes, Fed said that we would have unlimited QE to bring the rate down.
Let's back to your loan:
what's your loan amount, what's your property value? And what rate you prefer to get for the refinance.
I will reply to your questions after your reply.
Stay safe and healthy. Have a good weekend.
Posted in:General
Posted by Eric Fang on March 28th, 2020 3:56 PM



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