MLO | Mortgage & Real Estate Guide

Closing Challenges During COVID 19

May 07, 2020 Addy Nett Season 1 Episode 9
MLO | Mortgage & Real Estate Guide
Closing Challenges During COVID 19
MLO | Mortgage & Real Estate Guide
Closing Challenges During COVID 19
May 07, 2020 Season 1 Episode 9
Addy Nett

Today we give insight into the unique COVID 19 environment of Real Estate and Lending. What are the struggles? How are industry professionals preventing transactions from closing late? What are the best practices for Home Buyers and Sellers to adapt to this new way of doing business?

Show Notes Transcript

Today we give insight into the unique COVID 19 environment of Real Estate and Lending. What are the struggles? How are industry professionals preventing transactions from closing late? What are the best practices for Home Buyers and Sellers to adapt to this new way of doing business?

Addy Nett:   0:37
Thanks for taking the time today, ma'am. Are coming up on another months and aren't way.

Casey Carpenter:   0:50
Yes, we are. Yes, we are. And, as you know, months and busy times, probably for everybody involved. Months and no matter kind of how we usually try to work out our transactions. Usually they kind of all majority or a majority of them fall towards the end of the month. So

Addy Nett:   1:07
yeah. Yeah. And, you know, I really just wanted to take some time today, Casey, really? To talk about what's different these days with, you know, covered 19 in the pandemic and how that is affecting closing. Um, we've got quite a few different, actually, Not quite a few. But there's really split into two different deals here. So you've got your refinances, and then you also have your purchases, right? Those air that that the two buckets. Essentially, I'm and I really want to dig into the purchase side in what is going on regarding struggles to close. So we've got a lot of different things to cover, and I really want Teoh kind of distill it down to some digestible ah, buckets within closing and who all the players in the game are. So maybe you could kickoff. Um, the different agents, the buyers, the sellers and get us rolling on the combo.

Casey Carpenter:   2:05
Right? Right. Right. So right closing. Right. I mean, here's is your parties involved. We have your buyer's agent, um, Who is working with with the buyers of transaction. You have the seller's agent. You have your title agent involved Your escrow agent. Um, you have your self, your addy, your lenders in the dress on and you have the buyers, and that's gonna be I mean, kind of all your parties sitting there involved at the end. Um, so for Addy, I got I got a question right out of the gate. This

Addy Nett:   2:35
is so

Casey Carpenter:   2:36
I'm sure you might be seeing this. Um, are you seeing any lender's and titles moved to electronic signings now and I know we're kind of jumping ahead on it, but we'll assume most people kind of know what the sign it is. Sign is where buyers are meeting at the end. At normally your title office to sit down face to face with your title of Escrow Agent and sign all your paperwork. So now we have COVID 19. People are stuck at home. Uh, some people are afraid to go out being told they can't go out. We have a lot of stuff in place, people trying to stay safe. We're all trying to respect those rules. That brain your forward happened to usually be there sitting at a table with clients and everybody's smiling, taking pictures for signings. Now, we have a completely different scenario. Tell me, Yeah, what do you What do you see? An Addy and we'll start with that question.

Addy Nett:   3:36
Yeah, Yes. Oh, yeah. A couple different things. A couple different things to note there, Casey, like, yes, you're seeing electronic closings, and it's different per lender. So you're gonna have a full electronic closing in some states, you're gonna have a hybrid closing in. Other states were on a hybrid closing. Um, now, people that are closing this month likely won't be on electronic closings, because from everything I've been trained up on, you have to consent to doing the hybrid or full electronic closing at the start of your process. So that's something that's essentially been created within the last few weeks, and lenders are working to adapt and develop the system. So if you got into contracts, say, 30 45 days ago, you're not gonna have a, you know, an e closing right now. But that being said, what the process is supposed to be is essentially they're going to take when you do a traditional in closing, signing face to face, you're gonna have, like, 60 DA 120 pages, depending on the wonder and where you're doing your loan. And they're trying to bring that down to, like, four or five pages. So they want to bring an hour or 45 minute closed down to, like, five or 10 minutes just in and out. But I have seen a lot of ah, I have seen a ton escrow officers taking a ton of safety precautions, Um, like the plexi glass and whatnot. So when you're standing there and sign in, there's not any germs and all that good jazz. So I think, you know, in the next month or two you're probably going to see a lot more e closings, hybrids, and full. It's going to take a couple months to iron out all the problems with any new system like the S B A loans. I was just talking to one of my friends who is a ness p a woman officer at a bang. And they're having to develop a whole new system that they're not accustomed to. And it's the same with with a lot of the title companies. One of the biggest differences, though I really, really want everybody to hear and know about is like What can we do to prevent some delayed closings? Because people who have maybe bought a home before have experience, You know, either easy closings or maybe later, maybe early. We've all been amazing or better or worse, um, professionally. But now there are so many moving variables with the closing date because we're all working remote, and I think something that maybe not so much the agents, but at least the clients don't understand is like on the loan side, we all have, like, high, high, high security parameters on our our devices like VPN networks, 40 client. All these things like I like to use the term Pentagon security on all of our devices. I mean Yeah, Yeah. All this stuff. Yeah. It's like, you know, Casey, when you try to, like, freshly reboot your laptop, it it's like a three or four step, um, process to get through it like text me this code. Put this in here your mother's maiden name and then also, like, you know, when was your birthday and your favorite cat and this in person Now check this device. So I think one thing that really needs to be communicated and I've been starting to do this more is like a There's a lot of moving variables within the closing side. So not only the agents are not only the buyers, but Casey, who else? Like you've got the sellers. You've got insurance, you've got title. There's a lot of different roles in the closing.

Casey Carpenter:   7:19
Correct? Correct. A lot of

Addy Nett:   7:22
there are a ton of hands involved, and I think what what needs to be noted is like if you by any chance, can we East give yourself a little bit of wiggle room when it comes to the closing. Um, it used to just be easy, breezy like same day sell clothes. Move in them like that was the win win miracle and now those air still happening. But it's not a guarantee because there's so many loans going through. And then everybody is working on a slower efficiency rate being remote, that it's not making all the players not just the winning side, but the age inside the title. The insurance, um, less effective.

Casey Carpenter:   8:06
Yeah, and I think it's a good, uh, point to touch there because I was actually explained that kind of to someone earlier. Um, yeah. I mean, there has been a little bit of a slowdown, but honestly, I mean, right now I mean the mark. As far as for us, like purchase business, especially refinance business. I'm a lot of stuff. Still strong have really good interest rates right now. So you still have transactions. Are number handful lot of transactions still going on, But now we don't have people sitting in the office. You have people working remotely. You have. And so it's a whole different variety of a set up to try to still essentially do the same amount of volume you were doing before this crisis. And so I would hope that customers are having, um, you know, a bit of an understanding to for that closed date and everything that's going on to have some type of, you know, some leading suits because I am here. That and seeing that, um, on the market on

Addy Nett:   9:03
Yeah, for sure. And I think I can't stress enough like and it's maybe it's maybe an overused word, Um, in this day and age, but communication is key, like the it I have adapted to. This is, Well, it's like, you know, man, 34 months ago, I literally like, Oh, final week of closing. We got our appraisal back. Submit for final approval. No problem. You didn't even think about it like you literally did not think about the close. It wasn't that big a video. It was essentially like, oh, closer out of the washer, putting clothes in the dryer. And then now you're like,

Casey Carpenter:   9:40
hey, and scrub in everything you know, you're you're pinning it up,

Addy Nett:   9:44
Teoh. Try to dry it on the clothes line, and it's it's sprinkling outside and your clothes are dry. Yeah, near I get because it's raining outside. Casey. Um, so I'm being dramatic there. But communication is the key to just like planning because I think for the consumer, Casey, what's on their line is like, Hey, I got work. I've got kids, I've got daycare. I've got movers that I paid for. I've got furniture coming in. I'm gonna build a Yeah, yeah, right. I'm gonna I'm gonna maybe put a fence around my entire property, and those guys are actually showing up 30 minutes before I record. And it's like, Man, I just can't stress enough like having a little bit of flexibility, if you can on the closing day and you know, you'll probably hear other one officers out, they're going to say, Well,

Casey Carpenter:   10:36
we're having no problems at all closing. Everything

Addy Nett:   10:39
is going. I'm gonna tell you straight up, those people are just trying to get business.

Casey Carpenter:   10:44
They're just going to try to get your business. Everyone. It's like a full restaurants,

Addy Nett:   10:48
a full restaurant.

Casey Carpenter:   10:49
They're doing no business. And, yeah,

Addy Nett:   10:51
they're not in touch.

Casey Carpenter:   10:53
How hard is it? Because a couple loans

Addy Nett:   10:55
Ray? Yeah, and they're just maybe just focusing on their one deal. Now that's a good point. But yeah, it's busy. Like to use the analogy of the restaurant, the restaurants full, and everyone's trying to crank out on trays as quick as possible. But if you're going to call another restaurant and be a cake You guys serving fast? Yeah, they're going to say that they're going, They're having no problem even though that they're struggling. So I guess for the consumers out there I wouldn't fall for um, yeah, so we're having no problem. We're doing ah to two week lows and this and that is like maybe on cash buys. But like, I think compliant Lee, you can't cause ah, purchase deal in less than 10 business days, is it? I can't remember off the top of my head, but maybe it's 97 It's something like that.

Casey Carpenter:   11:44
Yeah, yeah, you're gonna put up.

Addy Nett:   11:46
So yeah, and another thing to consumers to it's the same with the rate I mean shifting over to with the raid environment. Um, you're seeing a lot of mixed feedback when it comes to where interest rates are at. Like I had one of my clients call it was like, Oh, I'm seeing that interest rates are, you know, a full point higher than what? We locked him in a and it's like, whoa, we like. I don't know where you're pulling that great off. And I think something to note is you're going to see wonders price very differently according to how they handled the huge dip in rates. Because the consumer doesn't know on the back end when ah, winter commits to that rate, they're committing to a margin, whether it's a profit or a loss on that particular term law term walked in by the consumers. So when everyone was scrambling around is moving really quick over 19. This that that you're seeing people probably cos locking in a ah loss on the loan. So they're trying to make it up by raising their rates. So you're seeing it all over the place like mixed reviews. Um, the only thing I could stress more, at least on the purchase side, is be in tight correspondence with your loan officer and know exactly what you're you know, closing costs, your monthly payment in your rates going to be when you're putting in the offer because it's changing. It's not as volatile as it was, but it is changing

Casey Carpenter:   13:18
and always, always, always let your loan officer no, you know, discuss that, you know, putting in the noticed. Noticed with your landlord. If you're renting those conversations just had them. Or if you're trying to set up dates for moving companies and all that stuff that's gonna be involved rather than be proactive and say, OK, this is closed A We're setting it all in there. At least just reach out. You have that conversation with everybody, especially the loan officer said, You know, does this seem like we're on track? We were on schedule. What if I set this up here with this work, and then you guys can discuss that, you know?

Addy Nett:   13:55
Yeah. Talking through the time minds is really important. And, you know, we're all adapting like I'm you. I've always considered myself a very involved loan officer and proactive, but I'm feeling myself especially toward the end, being so much more involved in the communication with the listing agent, the buyer's agent, and the clients, because pushing these through and get them done, You know, um, there's a lot on the wine, and yeah, has just super important. It sounds exhausted, but communication is the key. So you have some great takeaways for everybody today. Um, in just a summarize, Casey, I think we went like a Elektronik Closings are in the mix. We're seeing hybrid and full closings. I think there were still another 3 to 6 weeks out from seeing those being very accustomed. So you've got the Elektronik closing be Truell signings, the virtual signings

Casey Carpenter:   14:52
that never Yeah, those are

Addy Nett:   14:56
just getting launched. And I think that's why you're not seeing a little wonder is like I wouldn't we announce a Yeah. I wanted to hop on and on social media and be like all Elektronik closing. And I'm just like, Well, I better warn this before I promoted It's going to take some time Teoh, uh, incorporate that into a normal proceeding to close. So we've got, you know, electronic closings in the mix. Ah, were also noting to everyone, especially on purchase deals that be mindful of all the different players in in the transaction of ACLU's in using people that are local to your market is very beneficial. Ah, for example, like we had Tyler raw shutout Teoh tr ah, insurance agent in the market getting binders updated. There's a lot of insurance that people don't even know about that the lender needs in order to close on time. And if you're using a 1 800 insurance company, you're making it very hard on yourself to close because any changes needed are typically you're reaching out to 1 800 number and you're in the queue. We all know what it's like to call and, ah, you know, wait in line. And whole of

Casey Carpenter:   16:10
sure, it's Binder with 20 lenders will slip to the end, and that is a must. You have to have that in from your insurance agent.

Addy Nett:   16:17
They insurance. Yeah, that's definitely like one of the first things people can get on after they drop earnest money. Check on an accepted offer is like, you know, figure out your insurance and work. Um, I always recommend, you know, Hey, if you're if you have an agent like honor that relationship, give them a call and see what you can do Teoh bundle in your your insurance quotes. And then I secondly, have personal people that I know the hold customer service levels to my extent, you know T Ross being one of them. Casey, I'm sure you got peeps. We all got him, but supporting local as well as getting the attention needed to close on time Very, very big. Um, I believe that kind of hit home there on the closing. And then we we wrapped it up with, you know, interest rates kind of being all over the place. Ramon lender to lender, depending on how they, uh, have fared through the choppy waters in the last 60 days, I'm very proud that we've aligned ourselves with Finance of America. Ah, huge company that has done an amazing job and is servicing their loans and forked over Aton of capital to keep doing loans and not have any secondary issues and provide our outstanding terms. So proud to be we're both proud to be an alignment of ah fam and yeah, uh, anything else to add before we wrap it up? And we all got to get back here and we want just wanted to make sure we're still getting on the street

Casey Carpenter:   17:55
today in its draft day NFL virtual draft. We're all doing this virtual stuff nowadays. It will be interesting to see all this stuff. Today's Thursday it is. I don't jump

Addy Nett:   18:09
in the way draft day is tomorrow. Draft the NFL.

Casey Carpenter:   18:16
That's like jumping.

Addy Nett:   18:18
Just be quiet. NFL draft. Okay, Who's your team? Your Raiders fan?

Casey Carpenter:   18:24
Las Vegas Raiders.

Addy Nett:   18:25
Oh, my God. It's just

Casey Carpenter:   18:26
it's gonna let's see here. Stadium brick right there below the shoulder.

Addy Nett:   18:31
It's gonna take some time for Meteo Get used to saying Las Vegas Raiders. Um, while big shoutout Teoh Miami new friend Andrew Kinney down in Las Vegas. He had a had us on the live show on Monday. Great great experience in networking and hearing about different markets throughout the country. And no big surprise. The struggles and successes we're having here are the same in other places of the country. So, uh huh, thank you again. And you Ah, we we really appreciate that and having us on and promoting m o. And if you are a podcast listener, all of these live shames air available on apple podcasts and Spotify. So if you want to hop on there and subscribe and download, actively listening are also modern loan officers. That's plural. Modern loan officers dot com. You can do a direct listen to just on a browser if you're one of those people hiding from the world or afraid you're being tracked. Um, anyways, did Casey thanks so much I know we all got to get back to our stuff. I'm glad we jammed out a live session. And, uh, sir,

Casey Carpenter:   19:45
I appreciate it. Remember, everybody's Thursday, not Friday.

Addy Nett:   19:47
It's There's not Fred. It is draft day. Alright, Case, go get im. Thanks, man. Thanks. That later. Thanks for taking the time to listen to the podcast this week from M L O. Next week we have some hot and heavy coming in with a brand new M l O Member joining Christian Kemp. Well, we're gonna die. Vinto refinances what to look for. And is there really a good deal out there? If you ever wanna watch these recording streamed live, feel free to visit our Facebook page or any of the other social media platforms. We're here for you and any preference of digesting mortgage knowledge. Have a great day and we'll catch you next