Agents: When It Comes to Mortgages, Step Up and Overcommunicate

As the mortgage landscape continues to change during the COVID-19 pandemic, Motto Franchising, LLC president Ward Morrison says there are a couple of constants real estate agents should continue to lean on.

Appearing on this week’s “Good Morning RE/MAX with Nick Bailey,” Morrison highlighted the value of providing clients with information from a variety of industry professionals.

Talking with host and RE/MAX Chief Customer Officer Nick Bailey, Morrison discussed the importance of strengthening the collaboration between real estate agent and loan originator in all elements of a transaction. He said agents should reach out to their industry contacts, including title companies, mortgage preferred partners, home inspectors and appraisers, and also – most importantly – to their clients.

“Now is the time to double down on communication with all those partners,” he says. “The one thing we’ve seen is consumers are feeling such uncertainty. RE/MAX agents can be that trusted adviser during this process. They can really step up and overcommunicate. I think if they do that, they will have a lot of success compared to a lot of counterparts out there.”

One thing agents can do immediately, Morrison says, is redirect questions their clients have about mortgage forbearance. While an agent can’t find out whether a client can take advantage of forbearance as outlined in the CARES Act, they can encourage their clients to talk to their mortgage loan servicer.

The client’s loan servicer name and contact information can be found on the consumer’s monthly mortgage statement and will be helpful in finding out whether their mortgage loan is a federally backed mortgage loan as defined in the CARES Act that is insured or guaranteed by a government agency like  FHA or VA, or is a loan that is owned or securitized by Freddie Mac or Fanny Mae. Even if the client’s mortgage loan is not covered under the CARES Act, the mortgage loan servicer may be able to offer payment assistance during this crisis. Morrison also said it’s important to find out how repayment of the forbearance may work. He said with most, there is one of three ways repayment of the forbearance is working.

1.     180-day forbearance and then all six payments are due on the 181st day

2.     Loan modification after the period of forbearance with a little increase in the monthly payment over time

3.     Tack six extra payments at the end of the loan

Knowing the difference and where to go is a great resource to provide clients right now.

1.     Credit requirements are constantly changing. People are still able to get loans, but what they need their credit score or credit profile to be is changing. In some instances, a better credit score and/or a larger down payment are now required.

2.     Rates are changing but stabilizing. While rates were all over the board in the previous week or two, rates are starting to normalize, and lenders are starting to lock in lower rates more readily. Rates offered by certain lenders may continue to fluctuate as the lenders attempt to manage the volume of loan applications, so it might be important to work with a mortgage professional who can shop rates.

3.     Changes in verification of employment. This used to happen 10 days before closing. Now it is happening the day of closing.

4.     Outside the box loans are tougher to get. Jumbo loans and non-qualified mortgages are more difficult to get because they carry more risk and are less secure.

5.     The refinancing market is still strong. Morrison says they are seeing lots refinance action. He said one thing he always recommends is to work with a mortgage broker or other mortgage professional to shop your refinancing around to ensure you get the best rate.

“Good Morning RE/MAX” debuts via Facebook Live every Tuesday at 11 a.m. ET on the “We Are RE/MAX” Facebook page. The 30-minute show features Bailey’s insights along with conversations with guests from real estate, technology and related industries. Anyone can view the video, either live or at their convenience.

Each Thursday at 10 a.m. ET, RE/MAX CEO Adam Contos covers leadership principles and more on his weekly show, “Mind, Body and Business.” It, too, debuts with a Facebook Live session on We Are RE/MAX and is available for viewing at any time.