Corona Covid-19 Information

Mortgage Issues

• Margin Calls
• Warehouse Lines
• First Payment Default
• Non-QM
• Jumbo
• Government Loans
• Mortgage Forbearance
• Deferment

Mortgage process slower due to

• IRS shut no transcripts
• Credit- Rapid re-score
• Refinance are UP big time- workforce limited
• Appraisals take longer
• Credit score requirement – Higher
  DTI Debt To Income – Lower
• Verification of employment – Take longer
  done again Day of closing
• The good
• Drive by appraisals
• Once the Covid-19 is out we will have a massive growth-
  MY PERSONAL OPINION

Mortgage forbearance explained

The Covid-19 Coronavirus has led to some challenging times for all of us.

The Government has created the CARES Act to assist homeowners whose income may have been adversely impacted by the coronavirus.  One of the components of the CARES Act is the possibility of mortgage forbearance

Forbearance is often misinterpreted.  Many people are mistakenly thinking that forbearance equals forgiveness.  It does not.  This is truly intended as temporarily relief for those who need it most.

Forbearance means that the payments will be suspended for a short period of time, initially up to 6 months, but will need to be caught up when the forbearance period is over.

Think about when you buy something at a furniture store that offers “no payments” for 3 months.  You still must pay for the furniture…the payments are just deferred.

There is absolutely no financial benefit by exercising forbearance, as you will either have to pay a lump sum, modify your loan, or owe the balance when you refinance or sell your home.

If you really need to exercise forbearance, you cannot just decide to stop making payments.  You must notify your Mortgage Servicer and agree to the forbearance terms.

Depending on your situation, I may be able to help by eliminating your debts, lowering your payment, and giving you a cash cushion during these turbulent times.  I’m Racheli Refael, contact me to see how I can help.

FINANCIAL Support to businesses See more info and resources here

I am sure you are aware that the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by the President on March 27, 2020.   It included many provisions for individuals and businesses alike.  Attached you will find “The Small Business Owner’s Guide to the CARES Act” as provided by the U.S. Senate Committee on Small Business & Entrepreneurship.

If you are not a small business owner, but know someone who is, please pass this along.

The Owner’s Guide includes many embedded links to important resources.  I am providing the direct link to the document on the Senate’s website, so those links are “live”.

https://www.sbc.senate.gov/public/_cache/files/9/7/97ac840c-28b7-4e49-b872-d30a995d8dae/F2CF1DD78E6D6C8C8C3BF58C6D1DDB2B.small-business-owner-s-guide-to-the-cares-act-final-.pdf

Below is information about the various loans available (3 discussed below), but I’d like to summarize them for you and I suggest you apply for the EIDL loan and PPP loan once it’s available [April 3, 2020] for Small Businesses and Sole Proprietorships [ April 10, 2020] for Independent Contractors and Self Employed Individuals:

• Economic Disaster Loan Assistance (EIDL) – this will be a loan that the SBA will determine the amount you are eligible for based on the information that you provide.  You will need the following information:
  • General business info – EIN, when formed, when you took ownership, banking info (routing and acct #s)
  • Gross income/sales for the 12 month period ended January 31, 2020
  • If you in a business that has cost of goods sold, then you will need that amount for the 12 month period ended January 31, 2020
  • Borrowers can receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss.
  • If any of the $10,000 is forgiven, it must be deducted from any loan forgiveness under a PPP loan (see below).
  • Apply here – https://covid19relief.sba.gov/#/

• CARES Act – SBA Paycheck Protection Program (PPP)
  • This is currently not available (just put into law last Friday) – this will be run through your local bank and the banks are supposed to receive info from the feds by this Friday.
  • The maximum principal amount of a loan is limited to the lesser of $10 million or 2.5 times the average total monthly payments for payroll costs during the one-year period prior to the date of the loan. Payroll costs include salaries, wages, commissions, separation payments, payments for group health and retirement benefits, and payments of state or local employment taxes and compensation, but excludes compensation of an individual employee in excess of $100,000.
  • Economic injury disaster loans (EIDLs) made directly by SBA can be refinanced with proceeds of a PPP loan.
  • All payments will be deferred for a period of six months up to one year.
  • The maximum maturity of the principal balance not forgiven is 10 years.
  • The interest rate will not exceed four percent.
  • The proceeds of the loans may be used for the following:
    • Payroll costs;
    • Costs related to continuation of group health benefits during periods of paid sick, medical or family leave, and insurance premiums;
    • Employee salaries, commissions or similar compensation;
    • Mortgage interest payments;
    • Rent;
    • Utilities; or
    • Interest on other existing debt obligations.
  • The loans will not be subject to any prepayment penalty.
  • **There is a forgivable portion to this loan.   A business that receives a PPP loan will be eligible for forgiveness of indebtedness, which will be nontaxable, in an amount equal to the sum of the following costs incurred and paid during the eight-week period beginning on the date of the origination of the loan:
    • Payroll costs (using the same definition for determining the maximum principal amount of a loan as described above);
    • Interest payments on mortgage loans (provided that the mortgage loan was incurred prior to Feb. 15, 2020);
    • Rent obligations (provided that the leasing arrangement was in force prior to Feb. 15, 2020); and
    • Utility payments (provided that services began prior to Feb. 15, 2020).
  • The amount forgiven may not exceed the principal amount of the PPP loan. The amount of loan forgiveness will be reduced according to the following formula:
    • Amount of forgivable payroll and other costs described above, multiplied by the quotient of (A) the average number of full-time employees (FTEs) per month employed during the eight-week period beginning on the date of the origination of the loan by (B) at the election the borrower (1) the average number of FTEs per month employed during the period beginning on Feb. 15, 2019 and ending June 30, 2019, or (2) the average number of FTEs employed during the period beginning Jan. 1, 2020, and ending Feb. 29, 2020. For seasonal employers, the period described in (B) will be the period beginning Feb. 15, 2019, and ending June 30, 2019.
    • For the forgivable loan portion (which is not taxable by the way) part of the PPP loan, keep in mind that the SBA is now anticipating that non-payroll costs (rent and utilities) are going to be capped at 25% for the next 8 weeks.

• Florida bridge loan – to be an eligible business applicant, all of the following must be true:
  • The business must have been established and actively operating a business physically located in Florida prior March 9, 2020.
  • The business must be a for-profit, privately held small business that has or had a minimum of two (2), but no more than one hundred (100), employees within the previous year of the date of the declared disaster (March 9, 2020). For purposes of this eligibility requirement, a minimum of two employees means the aggregate number of W-2 employees, “1099 employees” (i.e. independent contractors), and leased employees.
  • The business must have repaid, in full, any previous Florida Small Business Emergency Bridge Loan.
  • The business applicant must demonstrate that the business has suffered significant economic injury and is unable to pay current operating expenses as a result of COVID-19.
  • Limit is $50,000, no interest for one year and then the interest rate goes up to 12% on the unpaid balance
  • You can now apply online here:  http://floridajobs.org/rebuildflorida/businessrecovery

SBA Applications and check lists Go here 

I am here to answer all your questions – WE ARE LEARNING AS WE GO – We are fully operational working remotely, and my contact info is below.

Racheli  Refael Mortgage Lending

954-800-0330

Racheli@loans-4-u.com