This week, Brian and David discuss the differences between servicer and lender, foray into forbearance, and stir up sales for the month of July.
This week’s highlights:
- Brian explains how being choosy about mortgage servicers can help clients
- David and Brian discuss why going into forbearance isn’t always wise
- Brian details the state of the real estate market for July 2020
Mortgage Servicer Vs. Lender: What’s the Difference?
Have you ever wondered what the difference is between a mortgage lender and a mortgage servicer?
The mortgage lender is the institution that loans you your money, like Accunet.
Your mortgage servicer is the company that sends you your mortgage statements and can be a bank or a ‘non-bank’ – like the well-known Rocket Mortgage.
After Accunet manufactures your loan, we then sell it to one of these Fannie Mae ‘seller-servicers’, whose job is to make sure the loan meets the breadth of processing criteria for Fannie and Freddie. Once the loan is sold to Fannie and Freddie, the servicer is the one that collects any monthly payments, makes sure your property taxes and insurance get paid on time, and, if you get behind on payments, the servicer is the one with the power to foreclose on you.
The servicer gets one quarter of one percent of your loan.
The remaining 2.75% of your loan goes to Fannie Mae, whose job is to guarantee the timely payment of interest on the loan, and the eventual payment of principal to the end investor.
Accunet, as a lender, is efficient at providing the upfront match-making with a servicer and helping to determine if your loan meets Fannie and Freddie’s criteria.
Accunet has several loan servicer-sellers in their arsenal to keep clients’ options open.
Some servicers are better at dealing in condos, better at cash-out refinances, etc.
Accunet is the best at finding the fit for our clients!
If you’re taking your first step towards buying a home, Accunet can get you an instant mortgage approval and rates.
This week, Brian told the story of one of his long-time clients, who currently has a loan in forbearance.
This client is an older gentleman, and the client’s son is helping to manage his finances. When the government passed the CARES Act on March 27th, the son thought it would be beneficial to take advantage of the forbearance clause; i.e. if someone is experiencing financial hardship due to COVID-19, the government would allow them to put their loan into forbearance and no payments needed to be made on that mortgage for six months.
Even though they were not in a financial crisis, the son thought to use the forbearance just in case, without knowing the extent of the consequences.
Because the client’s loan was put on hold, his credit score was not impacted, but it did impact Accunet’s future willingness to lend him money.
Fannie and Freddie communicate to their mortgage lenders that if their borrower requests forbearance on a loan while the lender still owns it, Fannie and Freddie will buy the loan from the lender, but will cut 7% off the top of it – making forbearance really dangerous for new lenders.
Accunet’s policy (regardless of the good rapport with the client) is if payments are skipped, the client must make three on-time payments before they apply for any new loan, as not to put themselves at further risk of a client going into forbearance on a new loan.
Read more about what to do (and not to do) if you’re considering mortgage forbearance.
July 2020 Home Sale Statistics
Lastly. Brian provided the home sale numbers for the 5-county Southeastern Wisconsin area for the month of July 2020, as pulled by the National Association of Realtors.
21 more condos sold than this time last year
The sales price on those condos is flat from one year ago
Year-to-date, condo sales are off only 5.4%
Year-to-date, values are up by $9,000
On average, 5x more single-family homes sold than condos
51 more homes sold than this time last year
The sales price on those homes are up $35,000 from one year ago
Single-family home listings down 5.5% since 2019
Velocity of sales:
On average, homes and condos are taking about 40 days for a seller to receive an accepted offer
The fastest municipality for getting an offer is Cudahy, WI, averaging only a week.
Other notable cities include:
West Allis: 13 days
Shorewood: 14 days
New Berlin: 15 days
Cedarburg: 19 days
Whitefish Bay and Kewaskum both falling in under a month at 23 days to an offer