Mortgage lenders say they are seeing the last of storm clouds and they predict blue skies ahead in 2019.
Robert Throne, president and owner of Port City Mortgage, expressed his confidence in a brisk new year.
“The market here, it’s always been good,” Throne said.
“Unfortunately, there is not enough inventory. In-demand houses are selling quickly,” he added.
While the partial federal government shutdown had been curtailing SBA lending activity, most mortgage loan programs were operating normally, according to Throne.
“The shutdown [was] affecting only one type of loan: USDA loans,” he said. “Everything else is fine.”
And although the winter season and lack of housing supply are contributing to a somewhat slow time now, following a dip in activity after Hurricane Florence, Throne anticipates that the pace will pick up as spring approaches.
Sales volume is typical for this time of year, said Lisa Mesler, PNC Mortgage’s area sales manager for the eastern Carolinas.
There was a “little bit of a slowdown” in recent months in this market because of Hurricane Florence, but the problems associated with the storm have largely passed, she said.
“We are now starting to see a nice recovery, getting back to what we are used to at this time of year,” she said.
“When the hurricane came about, we were trending to a slower time of year anyway.”
Florence did cause disruptions in sales, however.
“We had to go back and do reinspections before we could close [on homes that incurred damage],” Mesler said. “Some places did require repairs. Some clients did not move forward, depending on the extent of damage [to the homes they wanted to purchase]. Fortunately, we were able to work through the process of that. PNC covered any rate extensions as well as reinspection costs. The majority of our clients fared pretty well.”
Mesler herself was in the process of selling her own home in Wilmington, since she is now based in Raleigh. She accepted a contract on the home the week before Florence hit. As a result of the storm, the closing was delayed two weeks.
Port City Mortgage, which originated in 2013 as an online lender, lends throughout North Carolina. That fact allowed it to stay busy with loans elsewhere during the worst of the post-storm complications along the coast. The company’s competitive advantage, Throne said, is that its rates average slightly lower than those of many other mortgage companies.
Like Throne, Mesler cited the limited supply of homes for sale in the Wilmington area in certain price segments. Demand, she said, accelerated after the hurricane, fueled by people whose homes were destroyed and who wanted to purchase elsewhere rather than to rebuild. Some renters displaced by the storm also wanted to buy rather than to keep renting.
Finding affordable houses to buy “became a challenge for some of those prospective homeowners,” Mesler said.
The prospect of rising mortgage interest rates and the borrowing caps that existed for FHA and conforming mortgage loans worried some would-be borrowers, according to Mesler. Conforming loans are those that meet criteria that allow loan purchase by Freddie Mac or Fannie Mae.
Throne said there was concern, after the Fed’s December rate hike, that mortgage rates could hit 5 percent. “But rates have been going down recently,” he noted.
There is also some relief in terms of available loan amounts, Mesler said.
“FHA and conforming loan limits have been increased, which will allow more buyers to return to the market in 2019,” she said, citing an increase to $294,515 in the limit for FHA mortgages and an increase to $484,350 for loans conforming to Fannie and Freddie requirements.
“Those higher caps, coupled with historic low rates, mean more buying power for prospective homebuyers and more confidence for them to re-enter the market,” Mesler said.
Another positive note for prospective homebuyers: there are special provisions for people affected by natural disasters, Mesler explained. She said the FHA normally requires 3.5 percent down on a home purchase, “but if you were impacted by the hurricane and can prove you were impacted – if your house was destroyed or you were displaced from your rental property – there are opportunities … under FHA financing to get 100 percent financing.”
And first-time homebuyers can qualify for 3.5 percent down, rather than the typical 5 percent, on loans conforming to Fannie Mae standards, Mesler said. “A lot of people got discouraged, but now there is hope.”
Another sign that Wilmington’s mortgage market is healthy is the arrival of at least one new lender.
In late December, Corona, California- based Paramount Residential Mortgage Group Inc. (PRMG) increased its presence in the Southeastern U.S. with a new office at 2018 Eastwood Road, as well as new branches in Jonesboro, Arkansas, and Beaufort, South Carolina.
Founded in Corona in 2001 with three employees, PRMG now has nearly 150 branches nationwide and employs more than 1,800 people, the company's website states.
Caroline Maultsby heads up the Wilmington office. She has 25 years of experience as a mortgage specialist, according to a news release, having worked for such financial institutions as Flagstar Bank, CresCom Bank and Bank of America.