The pandemic has pushed every industry to take some drastic measures for the regular continuation of its operations.
Written by Northwest Mortgage
Published on Thu, Jan 14, 2021, Last Updated on Thu, Jan 14, 2021
The mortgage and home financing industry is no exception. Decisionmakers in the mortgage landscape are also continuously devising and implementing reforms that can create a win-win situation for how lenders operate and how clients acquire home financing. However, these reforms will take time to materialize and deliver results on the ground.
The development of vaccines and the commencement of clinical administration have given hope to people associated with the mortgage and home financing sector from both sides of the deal. Nonetheless, things are still far from normal and have yet to get out of this dark phase that has overshadowed everything in 2020.
How has this pandemic changed the mortgage industry and home financing? We’ve outlined some significant changes below.
Making More Room for Forbearance Requests
Before we get into that, forbearance is simply when your mortgage servicer (that would be the company that sends your mortgage statement and manages your loan) or lender allows you to pause or reduce your payments for a limited period of time. Forbearance isn’t there to erase what you owe, it simply allows for smaller payments, which will need to be repaid in the future.
The pandemic has hit various industries badly, resulting in significant job loss across the commercial spectrum. We all know that losing a job often sets off a cascade of unwanted outcomes that also includes homeowners applying for forbearance because they can’t continue with regular payment schedules.
Mortgage companies have received over 2.5 million forbearance requests in May alone. This amount has only increased in the following months. The overwhelming number of forbearance requests is pushing mortgage companies to come up with a solution where neither lender nor borrower ends up a loser. Any effective measure coming out of this situation may also prove to be a long-term solution for the payment deferral issue.
Lenders and Clients Have Become More Reliant on Digital Means
Digitization already swept across the industries before the pandemic. At that time, many people would consider mortgage and home financing as an old-school industry where people still like to do business in person. This long-established tradition has changed this year.
Mortgage loans, home financing, and real estate professionals and clients have started making the most of digitization. More people have started reaching out to mortgage and home financing experts on their websites rather than visiting their brick-and-mortar offices. Loan officers began assisting clients online. Moreover, there is a significant uptick in demand for home video tours.
Some realtors and mortgage experts have got even more creative and introduced “drive-thru closings” where both parties seal the deal, exchange the documents and paperwork while sitting in their vehicles.
We think this trend will transform into a norm post-pandemic. Many people who have successfully used the digital means to manage their mortgage dealings are more likely to stick to it even after things return to normalcy.
Northwest Mortgage has also adapted its operations to continue serving its clients during the pandemic’s testing times. We have made sure that clients can use our home improvement, home financing, refinancing, bankruptcy, and pre-approval services during lockdowns without any hassle through our website and online team.