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An Exodus to the Exurbs is Coming

Zillow ran a story recently on how the labor market and real estate markets will be impacted for years to come by the virus. Two weeks ago the Harris Poll found 75% of Americans working from home due to Covid-19 say they would prefer to continue that at least half the time, if given the…

Really Bad News for Self-Employed Borrowers

Fannie Mae and Freddie Mac released a new policy last week that has HUGE implications for self-employed borrowers. Here is exactly their new policy says- Income from a business that has been negatively impacted by changing conditions is not necessarily ineligible for use in qualifying the borrower. However, the lender is required to determine if…

Will Rates Rise or Fall?

JP Morgan strategists believe the Fed’s QE programs may need to grow even more to purchase the huge increase in supply of new debt issued this year by the government. If the Fed doesn’t increase QE JP Morgan is concerned that bond yields and thus interest rates could rise. This makes perfect economic sense to…

How the Pandemic Will Impact RE

Redfin wrote a great story last week after analyzing their April data of home views and an extensive survey on the percentages of people working from home that I want to share with you. First, pageviews of homes in small towns surged 105% year over year at the end of April versus the same time…

Why Our Economy Should Start Growing Soon

Brian Wesbury, Chief Economist for First Trust Portfolios is one of my favorite economists and he is even more of an optimist than I am. One of the reasons he is so optimistic is this-from 2008-2011 Quantitative Easing by the Fed did NOT make to businesses or consumers. Instead this extra money wound up in…

Will Interest Rates Go Negative in 2021?

The Fed Funds Future Market is expecting the Fed Funds Rate which the Fed directly controls to go negative by June 2021 if not sooner. President Trump is also asking for the Fed to cut short-term rates below 0%. JP Morgan Chase’s Strategists said, “Mildly negative rates such as -10 bps for a year or two…

A Very Somber Message from Chairman Powell

Fed Chairman Powell spoke last week on-line and he was pessimistic about our economy to say the least. Here are some his highlights- The path ahead is highly uncertain. He sees significant downside risk A prolonged recession and possible weak recovery if they don’t get relief correct. Additional relief may be needed Liquidity problems could…

Mortgage Late Payments at Record Low Levels

CoreLogic released its Loan Performance Insights report for February last week and I want to highlight this report since it’s B.C. (Before Coronavirus) to remind us of how strong the mortgage market and real estate market was before this event. These are national numbers. The 30 day or more delinquency rate was just 3.6% in…

Apartment Vacancies Increase

The Apartment Association of Metro Denver released their first quarter report last week and they found that average rent increased 2.2% in the first quarter to $1536. But the vacancy rate rose to 5.9%, up from 5.3% in the 4th quarter. This data was pulled BEFORE the Virus hit us hard though. So, what will…

Help for FHA Borrowers After Forbearance

I read that FHA borrowers who receive forbearance are required by their servicer to be offered a “COVID 19 Standalone Partial Claim,” which gives borrowers an interest-free subordinate mortgage that they do not have to pay off until their first mortgage is paid off. This way there is no payment shock for the borrower; but…

Forbearance is a Scarlet Letter Against Your Credit

Fannie Mae is now estimating that 15% of their mortgages will enter into forbearance. Earlier on they predicted that just 4% would enter forbearance and FHFA Director Mark Calabria famously said early on the forbearance rate wouldn’t be > 1%.  We also learned that in Fannie Mae’s Master Service Agreement as it currently reads that…

Why Mortgage Rates Could Rise

The Fed is reducing its purchases of mortgage bonds and has been doing so over the last 3 weeks. At its peak the Fed was buying as much as $30 billion a DAY in mortgage bonds. Last week their purchases dropped to about $8 billion a day and this week their goal is to reduce…