Covid-19 Real Estate Impact - Better Days Ahead
I never imagined I'd be writing a Blog like this one, but Andrew, Lauren and I all believe; Better Days Ahead and We're All in this Together.
There are some positive things to report.
The National Association of Realtors (NAR) is working with other trade associations and industry partners to expand access to remote online notary in any pandemic relief bills.
They have called for direct rental assistance for families who have income loss due to COVID-19 and relief for property owners from the financial obligations of forbearance and foreclosures.
The Department of Housing and Urban Development (HUD) noticed a foreclosure and evictions moratorium for 60 days (through May 16) for FHA single family mortgage borrowers and Home Equity Conversion Mortgage (HECM) borrowers. The Federal Housing Finance Agency (FHFA) has also directed Freddie Mac and Fannie Mae to do the same, while many individual lenders are offering individual relief to consumers.
This morning, we also saw more action out of the FHFA to temporarily expand the use of appraisal alternatives and provide flexibility around employment verification, such as acceptance of email from employer or bank statements showing payroll deposits. This is especially important as more businesses are forced to close during the pandemic and may be unavailable for oral verification.
Student loan servicers are also making arrangements for relief during this time, and the Administration is temporarily waiving all interest on student loans.
North Carolina Realtors Respond
The North Carolina Association of Realtors just released a new Covid-19 Addendum which My NC Homes will be incorporating going forward.
Here are the highlights of how the form will work:
- If circumstances related to the COVID-19 pandemic make it unduly burdensome or impossible for either or both parties to exercise a right or perform an obligation under the contract, there will be a one-time extension of contract deadlines by a number of days agreed to by the parties.
- A party whose performance is affected by a COVID-19 issue must notify the other party in writing to trigger the extensions. Notice may take place in the same way it is typically handled under the “Delay in Settlement/Closing” paragraph in the Contract, so long as it is in writing. An email from one agent to the other describing the circumstances should suffice.
- The extension of deadlines will apply to any contract deadline that has not already expired, including the Due Diligence Period and the Settlement Date
- The parties agree to make a good faith effort to use alternative methods that may be reasonably available to enable them to perform their rights and obligations under the contract
- If the parties are unable to close prior to the expiration of the extended period of time and they haven’t agreed to another extension, the contract will become null and void
- If the contract becomes null and void, the seller will retain the Due Diligence Fee and the Earnest Money Deposit will be returned to the buyer, regardless of the reason for the delay
- If the buyer is unable to get a loan due to loss of income related to the COVID-19 pandemic (for example, loss of employment), either party may terminate the contract, in which case the seller will retain the Due Diligence Fee and the Earnest Money Deposit will be returned to the buyer.
The Brookings Institute found that the Chapel Hill- Durham area is likely to be the second least likely area in the country to feel negative economic impacts related to Covid-19