June 7th, 2021 3:12 PM by Richard Sardella MLO.100007700/NMLS 233568
Forbearance for multi-family property owners is extended
Multi-family landlords, who have been sweating the end of the impending forbearance (delayed payment) period resulting from the pandemic economy, have been extended some relief for the next few months after learning that the Federal Housing Finance Agency (FHFA) has extended their options through the end of September.
According to HousingWire’s Georgia Kromrei, the regulator also extended protections for tenants that property owners must adhere to access forbearance. She notes that FHFA director Mark Calabria drew attention to the uneven pandemic recovery in a prepared statement. Job losses in the service industry sector severely impacted renters, while those who have maintained their jobs remotely have fared much better.
Says Calabria: “While Covid-19 cases are declining and many homeowners continue to emerge from forbearance, many renters, who are unable to benefit from rising home prices, have not financially recovered from the pandemic.” All the while, homebuyers who were able to snag homes in more affordable areas during the pandemic have lowered their housing costs even further, a recent Redfin study found.
In order for multi-family property owners to receive this reprieve, the federal forbearance options include requiring property owners to notify their tenants while their debt payments are on hold. “During forbearance, property owners can’t evict tenants solely for non-payment of rent,” says Kromrei. “Landlords also can’t charge late fees or penalties for non-payment of rent. They must also give tenants flexibility to repay the rent over time, not necessarily in a lump sum. If property owners do evict, they must give tenants at least a month’s notice to leave.”
The 11 million+ Americans who are behind on their rent include a disproportionate number of minorities, leaving them at a higher risk for evictions, according to data from the Private Equity Stakeholder Project. “Tenants, who are often in the dark about the financing of the building where they rent, can use the respective GSE (Government Sponsored Enterprise) property online tools to determine whether their building is federally backed.
Source: RHousingWire | TBWS
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
Rates are trending sideways this morning. Last week the MBS market improved by +5 bps. This caused rates of fees to remain unchanged last week. Rate markets experienced elevated volatility through the week.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas that have the greatest ability to move rates this week: 1) Inflation, 2) Central Bank, and 3) Treasury.
1) Inflation: Just how long will the market believe the Fed's "transitory" mantra? This week's Core (ex-food and energy) CPI is expected to be above 3%, with the Headline CPI above 4%. The bigger this number is, the worse it will be for rates. While the Fed is on a media blackout period leading up to their next FOMC meeting, Treasury Secretary Janet Yellen has given an interview where she said that slightly higher interest rates would be positive for both the Consumer and in the Fed's minds as well.
2) Central Bank: We will get key interest rate decisions and policy statements from the European Central Bank and the Bank of Canada.
3) Treasury: While we have three days of dumping our debt into the marketplace this week, it will be Thursday's 30 year Treasury bond auction that will get the most attention from bond traders and has the greatest correlation with the long term bond yields. Here is this week's schedule:
This Week's Potential Volatility: High
We have another important week for rate markets. We expect rate markets to remain relatively tame, heading into Thursday. However, we get a ton of inflation data on Thursday that could move rate markets and spark volatility.
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.