Today 2021-02-25 message on Navy Federal website
"Due to unprecedented market conditions, we have temporarily suspended accepting new applications for home equity loans and home equity lines of credit. This update doesn't affect applications that have already been submitted. You can track your application's progress in HomeSquad. "
Hmmm, this seems an odd time to take that position for them. Now when COVID hit that was the norm in the industry, but all players have come back since then. I wonder what is driving this change for them?
@Kevin Romines Same as the others. Current forbearance of almost up to 12 months due to pandemic. Not wanting to risk new loans for possible future forbearance. But I contacted them and they said hopefully soon they start again. But at least for now we do have the option and can go for a cash out refi.
But we did feel the chills for a good hour or so.
I wondered if the forbearance's might be coming in to play just yet?
The thing that makes this one different than the last meltdown is, that the lenders can control to some extent the level of foreclosures there will be. They could just put the missing payments at the end of the loan and avoid many foreclosures that way. If they take a hard stance of wanting all those payments immediately or increasing the mortgage payment by half again, for the next 24 months, that would put undue burden on to many, cause many to either sell or fall into foreclosure?
So the lenders can control their own and the markets fate?
@Joshuam Rivera I bank with VyStar credit union. I inquired about a possible HELOC a month or so ago. But I quickly decided not to move forward when I was told that their current estimated time to close and solidify the credit line is running 4+ months due to unprecedented application volume. I found that very interested and chatted with my loan advisor about that for a few minutes. He said a large amount of applicants are borrowing to pay down other outstanding debt, at much higher ratios than he has seen in the past.
Probably only a matter of time before they follow Navy Federals lead.
That is interesting, as I pay attention to HELOCs on investment properties, and I will be watching to see if this is a blip or becomes a trend.
@James Leigh Yes, I hear you. I noticed they always mention the worst case scenario in closing time, but they move as fast as you move. I get the same estimate with Navy, but I am always responding within 20 mins with any documents they request, also I call or send email to rep once 24 hours hit of no replies from their end. Last one I tried took 6 weeks from application to appraisal and closing date selected. We did not close on it because sadly missed our target appraisal value. Also do to credit history hiccup last minute it missed the above 720 credit score mark which is best for a 90% ltv.
We are now in that position, started the clock again with them. Application was started March 01, Credit pulled, documents signed and returned. I foresee that next week will be the appraisal scheduling /payment. Once Appraisal visit the home I give them 1 week for the to turn it around to the bank.
I say for others reading this, the only way to know the true turn around is move fast on your end with all your documents they request, and call back no more than 2 days of them not acknowledging you, and good luck.
@Kevin Romines Yes I believe they always at play, If not mistaking due to the pandemic some forbearances can be up to 12 months. I as the money person (bank) would not risk giving a second loan or third to a property that may default on all three. like you said it makes sense for them to control their money, same way we do and should by looking at conditions. But it affects members that are ready and willing to pull the trigger on their next strategic investment risk and just can not and need to wait in the meantime.