COVID-19 Ask the Lender Q&A: What to Expect with Buyers and Financing in Our Rapidly Evolving Real Estate Market with COVID-19
In our rapidly-changing market, it’s important to lean on trusted professionals.
Today, I’m sharing my Q&A-style interview with Anthony Ferrando with Motto Mortgage, where he shares wisdom, recent experiences in a COVID-19 marketplace, low-low interest rates, and how to stay sane in a volatile market. It’s a longer interview (I had lots of questions and Anthony was gracious in answering them thoughtfully for our clients and friends), and it’s definitely worth the read. Enjoy!
Interview with Anthony Ferrando, Mortgage Loan Originator with Motto Mortgage
Lora: As a mortgage lender, if you could give 3 pieces of advice to real estate professionals in this market, what would they be?
Anthony: First, keep working. I know we all have a long list of people to follow up with. The best thing we can do right now, is continue making those calls. Our job is to help people buy, sell, and refinance houses. Even though most of our society is on quarantine right now, we still have many people who have to move. Our job is to find these people and help them.
Second, adapt to the current situation. Showings are going to be harder to schedule right now, as sellers worry about having people walk through their houses. Appraisals are going to take longer. Underwriters are working from home, and turn times have increased slightly. Buyers may be more anxious leading up to closing. These challenges require us to adapt and overcome. In every challenge, there is a solution, and we can find those solutions if we choose to adapt.
Third, wash your hands & don’t touch your face. This seems to be the advice everyone is giving right now, so I thought I’d include it here as well.
Lora: What’s 1 thing that you would advise real estate professionals NOT to do?
Anthony: Please, do not panic. I have talked to a few real estate professionals lately who do seem to be panicking. I do not think this helps anyone. Think about it, when a hurricane hits the gulf coast the meteorologist is never panicking. This professional instead calmly explains the situation and lets the viewers know how they can best prepare themselves. This is the attitude we must take as real estate professionals. We must be a calm voice of reason, explaining the situation to our clients & the options that they have. Then, we must allow our clients to make their own educated decisions.
Lora: What has surprised you most about this environment?
Anthony: I’m not sure how surprising this is, but my favorite thing about this environment is how well everyone has worked together. Title companies, lenders, listing agents, and buyer’s agents, have all come together on a level I have not seen before. We always work together with a common goal, but I have seen professionals rise to the occasion to serve clients at an even higher level during this situation. We seem to all have a mutual understanding that some things are beyond our control right now, but we can all work together to make the home buying experience great for our clients despite the madness. This is something we should all be proud of.
Lora: What’s your biggest takeaway for the mortgage and real estate industry?
Anthony: The best thing we can do as professionals is provide our clients calm guidance and clarity. If someone is buying a house today, they aren’t planning to sell it next month. They will be living in the house for, on average, 6-10 years. By that time, the current uncertainty in our market will be a drop in the bucket of their overall house appreciation over that time-frame. The most important takeaway for these clients is that by the time they sell the house they’re buying today, they will have so many memories living in the house, and so much equity built up, that the day-to-day fluctuations we’re seeing as a result of today’s market will be irrelevant.
Lora: What key indicators do you watch as you prepare for your day or week?
Anthony: This question is interesting, because usually I watch Mortgage Backed Securities pricing every day – and I still do. MBS pricing generally is the metric that controls primary mortgage rates. While I am still watching this indicator constantly, I have come to understand that lately MBS pricing is only a suggestion, no longer a rule, for what will happen in the primary mortgage market.
The real indicator I am watching, is the wholesale lender rate sheets that come out each morning and afternoon. As a mortgage broker, we have access to several wholesale lenders. The most interesting part of this market is that some lenders will increase rates while other lenders, at the exact same time, will lower their rates. The uncertainty in the market has created a moving target on rate sheets, and I am grateful that I’m not tied to one specific lender.
Lora: What has your experience been in the last 10 days with your business? Have purchase contracts slowed down?
Anthony: In the last 10 days, my experience has been chaotic. The main source of chaos is the uncertainty in the mortgage rates. Usually, we see lenders repricing their rates once or twice per day. Lately, they have been repricing up to 5 times in a day. Similarly, we usually see mortgage rates follow the same path as the mortgage-backed securities market, however in the last 10 days there is has been little correlation between retail mortgage rates and the MBS pricing on the secondary market. This is due to the volatility we are seeing in the market, concerns over servicing loss & the effects of the upcoming stimulus bill, and a lack of liquidity throughout the economy. Lenders are pricing in added risk related to these market movements, and many times they are repricing their rates lower in the morning and then increasing sharply in the afternoon.
We are also seeing a temporary dearth of non-conforming loan origination. Loans such as bank statement loans, stated income loans, ITIN loans for non-citizen borrowers who do not have social security numbers, are being rejected by lenders who previously specialized in these loan types. Jumbo Loans are also having a very hard time securing rate locks and funding. This is caused by a lack of liquidity – investors in the secondary mortgage market are not buying these loans after they are originated, because of the increased risk profile in these loan types. Because of this, many lenders are halting origination of these loans altogether.
I have not seen purchase contracts slow down. Business in general has been very busy on my desk, and it has been a healthy split between purchase contracts and refinances. Buyers who were planning to buy houses are still keeping those plans. Many buyers are seeing the current market as an opportunity to have less competition and even secure a better deal on a house than they were able to secure just a month ago. I have seen some buyers who were very nervous or anxious because of the market, but most buyers are still committed to their plans of buying. This is true for investors as well as first time home buyers, in my experience.
Lora: Anthony, thank you so much for your time–this is great information that benefits all real estate professionals.
Meet Anthony Ferrando
Anthony is an experienced mortgage loan originator whose style of business emphasizes patience, persistence, and lightning-quick response time. Anthony has a track record of keeping his word and maintaining solid lifelong relationships with his clients.
Prior to joining Motto Mortgage Home Town, Anthony was a successful real estate agent and broker for many years. His prior experience as a broker gives him a unique perspective when assisting his clients in exploring their mortgage options. Anthony has a keen understanding of all the moving parts and stressful situations his clients are dealing with as they navigate down the path to homeownership.
A native Texan, Anthony enjoys spending time eating Tex Mex, watching Hockey, traveling, and attending the football games of his alma mater; The University of Texas.
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