Here is Mortgage update:
Last night the big banks announced a collaborative effort to allow for six month deferrals of mortgage payments and other credit. We do not know the specifics yet, I expect all lenders to follow suit, and we will know later this week how this will play out. Morneau just said a $50B package is available to banks & lenders. Very important. If your clients are asking please have them contact their bank directly because they will get the answer quickest. Most banks/lenders do not know yet how this will play out though. I can absolutely help clients figure out where to call. I am posting a thorough lender list today of all contact information.
Appraisals are starting to be a little more difficult to do. Get your appraisals in asap. Lenders might start accepting "drive-by" and desktop appraisals which will help when properties auto-appraise or aren't "unique". If your client (over)paid to get their house, they should be prepared to make up the difference(s).
Refinances might dry up next week, as early as Monday. All refinances in the pipeline will continue to be funded but new applications may stop. This won't be with every lender but this is not something I am surprised to see/read. This would be a HUGE impact on our ability to use our equity to survive the next 6 months. Ugh. I'm worried.
Interest rates are going up. Variable-rate discounts are evaporating and fixed rates are rising. Bond yields have steadily increased in the last 3 days. Hence, the lenders' increases in rates. Liquidity is becoming a problem. Hence, the lenders' increase in rates. Clients who are rate-sensitive should get approvals asap. All docs with broker/lender need to get in TODAY. No delays. This is not a time to 'shop around' in my humble opinion. Advice, not price.
Approvals are taking longer - not 5 days yet - but a little longer than normal due to: 1. Volume, and 2. Staff working from home. Lender exceptions may not be around much longer - if your file needs one extra checkmark, oh oh.
People who bought and need to sell must have a plan B as soon as possible - just in case. Anticipate a quick sale may not happen and/or be hugely impacted, so a refinance or HELOC option may be the only option. The private market is going to cut back. "65% is the new 80%". This means the percentage of loan to values will be lower, which means less equity will be available to extract by borrowers.