NAC Blog: Liquidity, Confusion Over Forbearance and the 2020 Census

Celebrating NAHREP familia, cultura, politics, and grassroots action

Que onda mi gente?!

Greetings from California where we are on Day 18 of statewide sheltering-in-place. I hope many of you are investing in some Zoom stock because as a society we are now working, learning AND socializing on Zoom. I’m seeing birthdays being celebrated on Zoom, book clubs, happy hours, even retirement parties! In all seriousness though, so much love and prayers go out to our NAHREP familia in New York and New Jersey who are going through the eye of the storm right now. As much as we are collectively taking a hit economically right now, we can bounce back from a recession. We did it after 2008 and we will do it again. However, as I saw on a meme recently, we can’t bounce back from death. Protecting the lives of our families, communities, along with the nurses and doctors who are on the front lines of this great battle, has to be our number one goal. I hope that as many of you as possible are staying home, and are taking every single precaution during this time. The next few weeks are bound to be the toughest.

Over the next few weeks, we will be conducting a member poll so that all of you can share with us what you are seeing in the market, what your greatest concerns are, and how you are managing in these difficult times. Please be on the lookout and respond so that we can best serve our members.

Some updates we’ve been seeing in the market:

CARES Act: If you haven’t already seen it, make sure you watch the video we released last week highlighting the major provisions of the CARES Act. We’ve gotten a lot of questions from you about the bill, particularly around small business loans and forbearance options for mortgages. NAHREP will be spending the next few weeks releasing a series of videos outlining how the CARES Act applies to you and to your customers. We need your help dispelling some of these myths so that you can best serve your customers and families as we weather this storm.

Liquidity in the Market: Please rest assured that the NAHREP advocacy team is working nonstop on the many issues we’re facing not only as an industry, but as breadwinners during these turbulent times. However, no issue should be more alarming to us right now (other than the spread of COVID-19) than the threat to the entire mortgage industry posed by the liquidity crunch mortgage servicers are currently in. While the CARES Act provided much needed relief to families across the U.S. struggling to pay their mortgage, mortgage servicers are still on the hook with paying investors, even if borrowers are granted forbearance on loans. As a result, many servicers across the nation are on the brink of bankruptcy, which poses a systemic risk to the entire real estate industry. An important announcement came from Ginnie Mae last week with some liquidity and advance relief but more needs to be done. We will be joining industry leaders to push for government aid to the mortgage industry so that we can ensure that Latinos can keep their homes through this tough economic period.

But first, please share the following two pieces of information:

  • Loans payments are not being forgiven. If you can pay your mortgage, please make sure that you do. Forbearance options mean that people can have the option to delay their mortgage payments. However, these loan modification options are only for people who are directly impacted by the coronavirus, either by a loss of income, employment or by becoming ill.
  • When you call your servicer asking for a forbearance, you have the option to request that the months of forbearance are tacked on to the end of the loan in order to avoid a balloon payment when the forbearance period is over. There has been a lot of misinformation about this and many servicers have not updated their guidance on this since the passage of the CARES Act.

Overlays and tightening of Credit: I’ve heard from many of you that many loan products are disappearing and overlays are being added. Sellers are afraid to list and expose their homes and buyers are concerned about employment. Additionally, houses are under-appraising. Also, with non QM products disappearing, ITIN loans are essentially gone. Please let me know what you would add to this summary as we continue to navigate our advocacy efforts.

Fill out your Census form! Yesterday was National Census Day and you should have received an email from us urging you to do your part to make sure we are counted. The Census happens once every ten years and Latinos have historically been undercounted which leads to an underinvestment in our community. Pease help us share the following information with your respective communities.

Muchas gracias familia. Please keep sharing positive uplifting videos. Yesterday, a friend of mine invited me to join a meditation challenge. We will be doing the Oprah and Deepak Chopra Meditation: Finding Hope in Uncertain Times. Highly recommend it. If anyone else is doing it, let me know!

Un abrazo.

About Noerena Limón

Noerena Limón is NAHREP’s Senior Vice President of Public Policy and Industry Relations. Noerena heads the organization’s policy and advocacy efforts on issues ranging from homeownership, housing inventory, credit access and immigration.

Prior to joining NAHREP, Noerena spent six years at the Consumer Financial Protection Bureau (CFPB) and served as a political appointee under President Obama in the White House Office of Political Affairs.