Market Bounce Back?

By Martin Santiago

THE chairman of the Federal Reserve on Sunday said the central bank has not exhausted its power to help the economy get through the coronavirus pandemic. Fed Chairman Jerome Powell said, “There’s a lot more we can do. We’re not out of ammunition by a long shot. There’s really no limit to what we can do with these lending programs that we have.”

On Monday, May 18, at the start of another week under California’s stay-at-home order, Gov. Gavin Newsom rolled out slightly loosened criteria for counties that hope to allow businesses to reopen more quickly than the state overall. Twenty-four California counties have moved into Expanded Stage 2, according to Newsom. The later phase of Stage 2 allows dine-in restaurants, shopping centers, community centers and schools to reopen with modifications.

On the same day, a candidate vaccine for Covid-19 developed by the drug maker Moderna appears to generate an immune response similar to the response seen in people who have been infected by the virus and recovered. All these caused the market to spike and reached its highest level since April. It was up by 900 points.

Investors were positive about the development in our fight against this pandemic.

On Tuesday, May 19, the director of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced that borrowers may now refinance or buy a home with a new mortgage if they have begun to make payments on their current mortgage again. They can do this if they’re in the forebearance program, or also if they have gotten out of it already. But they have to have made at least three months’ worth of payments. The previous guidelines had said borrowers must be current on their mortgage for at least a year.

The director of the Federal Housing Finance Agency announced that borrowers may now refinance or buy a home with a new mortgage if they have started making payments on their current mortgage again. FHFA is also extending Fannie and Freddie’s ability to purchase single-family mortgages that are in forbearance. They can now buy forborne loans, with note dates on or before June 30, as long as they are delivered to the two by August 31st, and have only one missed mortgage payment. The previous policy was set to expire on May 31.

These welcome moves ensure that homeowners who continue to make on-time payments – and those who have successfully exited forbearance – can benefit from near record-low mortgage rates.

Borrowers may apply for mortgage forbearance with no proof of hardship, only declaring that they are unable to make their monthly payments. While the number of borrowers continues to increase, now with just over 8% of all borrowers in forbearance, the weekly volume of new applicants is shrinking.

As people venture into the real estate market, it’s critical they have precise information and guidelines on how to stay safe during every part of their move. Home showings are now allowed in owner-occupied homes as long as they comply with guidelines. Houses are getting listed again as the economy reopens and more people are going back to work.

Some industries in the Bay Area are changing like Uber who laid off almost 30% of their workforce but are now acquiring GrubHub, a food delivery service. Businesses are changing. Commercial real estate will have a tough time bouncing back but residential real estate is holding up. With a steady job demand in the Bay Area, home prices are holding up.

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Martin Santiago is a broker associate at Compass Burlingame, a full-service residential brokerage firm. He is also a licensed mortgage loan originator & an International Associate at the American Institute of Architects. The information presented in this article is for general information only and is not, nor intended to be a formal legal advice nor the formation of a broker-client relationship. Call or email Martin at (415)850-7704;;

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