August 9th, 2021 11:06 AM by Richard Sardella MLO.100007700/NMLS 233568
For at-risk renters and their landlords, the pandemic landscape continues to cause drama
For many Americans who rent instead of own their residences, the pandemic has upended their lives. With job losses comes the inability to pay rent, meaning eviction may not be far behind. The CDC recognized back in September 2020 that for renters to be forced from their homes also means greater risk of peril for the population at large. Evicted families, especially in the most vulnerable neighborhoods, may need to move in with other households or into crowded shelters, causing the virus to spread even more quickly.
For that reason a new moratorium on evictions was announced recently. But this moratorium no longer covers the broad spectrum of renters it once did. So what does the new ban mean for the millions of renters facing eviction as well as their landlords awaiting rent money? As reported by NPR’s Laurel Wamsley, the CDC's new 60-day reprieve applies only to counties with substantial or high transmission of COVID-19. “The agency's authority for such a ban derives from the Public health Service Act of 1944, which gives the Department of Health and Human Services (of which CDC is a part) the authority to declare and respond to public health emergencies and control communicable diseases,” she says.
The last ban expired on July 31, after the Supreme Court signaled it wouldn't accept any further extensions without congressional authorization. Then Congress failed to act to extend it. So the current administration created a stop-gap measure to continue the moratorium in the most hard-hit communities. Admitting it might not survive potential legal challenges, President Biden says he hopes it will at least buy people on the brink of eviction some breathing room.
“The CDC's new ban is temporary,” says Wamsley. “It's set to expire on Oct. 3. Still, it's a crucial extension for low-income renters.” In the meantime, the White House has urged state and local governments to get the funds out efficiently to renters and their landlords and to be flexible around documentation.
The application process, however, is no cakewalk. “Some communities have required reams of documentation and applications 30 or 40 pages long,” Wamsel says, "all of which slows down the process for everyone and often weeds out some of the lowest income and most marginalized tenants who can't produce the documentation that's required in other communities.”
While the clock is ticking loudly for many cash-strapped renters, states do have time to distribute the funds, as the ERAP program runs through 2025. As for owners and operators of rental housing, however, lawsuits have been filed against the federal government over the previous eviction ban, seeking to recover damages on behalf of rental housing providers.
Either way, millions of renters are hoping that the aid they desperately need arrives before an eviction notice does. Wamsley advises renters looking for emergency rental assistance to apply through the Consumer Financial Protection Bureau.
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are moving sideways so far today. The MBS market worsened by -58 bps last week. This was enough to worsen mortgage rates or fees. The market experienced high volatility last week.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) The Fed and 3) Treasury.
1) Inflation: We get several major inflation data points this week with the focus on CPI (core expected to be 4.3%), PPI (core expected to be 5.6%) and Import Prices. The higher these readings are, the worse it is for your pricing.
2) The Fed: We hear from several Federal Reserve members this week and the markets are very keen to hear what they have to say about growth, inflation and will try to use their commentary to hedge their bets on the timing of an eventual decrease in the level of their monthly MBS purchases.
08/09 Bostic, Barkin and former NY Fed Pres Dudley
08/11 Bostic, George, Atlanta Fed Business Inflation
08/12 Fed's Balance Sheet
3) Treasury: We have a large amount of debt that we are dumping into the market place with Thursday's 30 year Treasury Bond auction having the most weight for our MBS trades.
08/10 3 year note
08/11 10 year note
08/12 30 year bond
This Week's Potential Volatility: Neutral
This morning the markets are largely moving sideways. Volatility is moderate with no more major economic news today.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.