March 17, 2020
From the Desk of Mike Donoghue
Coronavirus Q and A
March 17th, 2020
In response to the unprecedented reaction to Coronavirus and the associated impacts on employers, schools and government facilities we want to provide guidance to our real estate professional partners. I will forgo the boilerplate language on how important the health and safety of our employees and customers is as it goes without saying. I will however put some Q&A out that has occurred and continues to occur.
Q. If the clerk’s office is closed can my real estate transaction still close?
A. Premium Mortgage Corp. has invested heavily in technology over the past few years allowing for us to be paperless. When it comes to closings, we are prepared to do electronic recordings and we have arranged for title insurance companies to provide “gap insurance” that should not delay any closings so long as the buyer and counsel wish to close. We have closing agents that are prepared to close via skype for those who are at high risk or simply want to avoid contact.
Q. Is Premium Mortgage Corp. remaining open?
A. We have no plans to close however we are allowing as many people to work from home as possible and encouraging interaction with consumers to be primarily telephone, email and text. We will meet one on one as needed. We are practicing social distancing NOT social quarantine.
Q: Did mortgage rates go down due to the Federal Funds Rate being reduced
A: The Federal Funds Rate does not set mortgage rates. Mortgage rates typically track the 10-year T-bill but are directly connected to mortgage backed securities. Rates have in fact dropped slightly, but not that much from last Friday.
Q. My borrower has a mortgage commitment but was recently laid off/put on furlough/had hours reduced, Can they still close?
A. Each case is unique but in general a borrower must be at work or have a definite return to work date in order to close. There will be files that are delayed until the borrower returns to work.
Q: Will contract closing dates be met?
A: At this time we will do everything in our power to meet contract closing dates. There may be instances where dates can’t be met due to circumstances beyond our control and we will deal with them on a case by case basis.
Q. Is my preapproval letter still good?
A. Premium Mortgage Corp. prides itself on being the gold standard for preapproval however we cannot control if a borrower has been laid off or if investment funds needed for closing have suddenly gone away. Each transaction should be evaluated based on its individual circumstances. For example, restaurant employees are being adversely affected at a much higher rate. I would encourage anyone with concerns to contact their Loan Officer and update the preapproval. If you have not yet used our Quick Qualification app now would be an ideal time to familiarize yourself with it.
Q. I got a Premium Mortgage Corp. “Cash Guarantee” is it still good?
A. Any PMC cash guarantee issued will be honored. We will not be issuing them effective March 16th until further notice.
Q. I locked in a low rate, but my closing is delayed for a reason directly linked to Coronavirus and my rate is expiring, Will my rate be honored?
A. Our policy on rate lock extensions is 2bps per day for extensions so long as they are requested prior to expiration. If your closing is delayed as a direct result of Coronavirus, we will cut the extension fee in half to 1bp per day. 1bp on $100,000 is equal to $10 for perspective.