Written By: Hina Habib
The extensive power failure paralyzed the region in the wake of Hurricane Sandy, delaying closings in the mortgage deals. In order to proceed with these closings lenders are requiring inspections from the certified contractors, to make sure if there are any damages. Lenders are also very closely monitoring flood insurance coverage in those areas. This incident will also have trigger down affect on homeowners and flood insurance prices.
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Along with all the bad news we have some encouraging environment too. Like in the past, you would think that the mortgage industry will slow down at least for a year, after the Hurricane. But against our expectations and fortunately in the second week of November, the mortgage industry was able to return to more normal activity even in the states that got hit by Hurricane Sandy. According to a survey done by The Mortgage Bankers Association's Weekly Mortgage Applications, mortgage applications volume, increased 12.6 percent on a seasonally adjusted basis and 12 percent on an unadjusted basis from the week ended November 2.
An increase of loan applications for refinance and purchase were noticed in the beginning of November, which is a good trend for the mortgage industry. Hence “Following the decrease in applications two weeks ago due to the effects of super storm Sandy, mortgage applications in many East Coast states, rebounded strongly this week," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Application volume in New Jersey more than doubled over the week, while volume in Connecticut and New York increased more than 60 percent. In addition to the rebound in the states impacted by the storm, the 30 year fixed mortgage rate reached a new record low in the survey."
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Fannie Mae and participating mortgage servicers decided to provide relief to homeowners who have been affected by this recent natural disaster. In the current situation Fannie Mae has decided to help all Sandy victim borrowers who are in foreclosure or trying to do modification, by giving them 90 days extension. Fannie Mae is expected to issue updated guidance to servicers to expand the options they can offer to disaster victims. Homeowners who have suffered property damage, or who are suffering from sudden loss of income are being aided right now. Servicers are currently offering several options to borrowers. Some of the options are listed below:
1. Forbearance extension for 12 months or more for eligible borrowers.
2. Waiving late payment charges during forbearance.
3. Suspend credit reporting during this time if home is in a disaster designated area.
About The Author
Hina Habib - As an NAMP® staff writer, Hina Habib has been working as a Loan Processor with mortgage industry for more than 15 years now. Hina is a loan processing instructor for Loan Processor University (www.LoanProcessorTraining.org). She has ample experience of structuring and processing FHA, VA and Conventional loans. She worked with an established Correspondent Lender/ Mortgage Broker for 13 years. After her promotion as a Senior Loan Processor she trained loan officers and other processors. Currently she is working with a strong and established banking institute as a Mortgage Processor II. She is very well informed with the current on going changes in the mortgage history and can help answer your questions more accurately. If you're interested in becoming a writer for NAMP®, please email us at: contact@mortgageprocessor.org.
