Survey: 95% of homeowners on forbearance may not have needed it

A LendingTree survey of homeowners who requested and received forbearance to temporarily postpone or lower monthly mortgage payments shows only 5% of them would not have been able to pay their mortgage without it.

The vast majority of respondents claimed they could have made payments without forbearance, which means 95% could have paid but chose to apply anyway.

Covid-19 related hardships tested many homeowners leading to millions of mortgage forbearance requests. One in four, or 25% of the 1,305 homeowners who participated in the representative survey between April 28 and May 1, 2020 applied for forbearance. Lenders approved up to 80% of applicants, of which 72% reported feeling “at least a little guilty about it.”

The survey found 26.2% of survey respondents said that to be able to pay their mortgages without forbearance relief they would have needed to skip “other essential bills.”

Conducted by Qualtrics, the survey also reveals certain gender, generational and income differences.

Women were less likely to apply for forbearance, the survey shows, as 10.2% of women and 37.8% of men surveyed applied for relief. Approval rates between the genders were slightly different at 75% of women and 81% of men.

Millennials, aged 24 to 39, and Gen X homeowners, aged 40 to 54, were more likely to apply as 71% of these respondents said they could have made their payment but just wanted a pause.

Aged 55 to 74, baby boomers, are more likely to own their homes outright or are closer to paying off their mortgages, only 20% of this demographic needed forbearance.

Higher-income homeowners were more likely to apply and get forbearance, the report notes, probably because lenders see higher-income earners as more likely to repay.



Wells Fargo’s incubator expedites $900K to cleantech startups

The Wells Fargo Innovation Incubator (IN2) has accelerated its $900,000, September 2020 awards program to help cleantech and sustainable agriculture startups retain staff and continue working on their potentially game-changing solutions to market.

Channel Partners, a network of technology incubators, accelerators and university programs that refers promising startups to IN2 will provide support for pre- and post-revenue cleantech startups in markets across the country, three months in advance.

The goal is to spare probable hardship, the foundation said, since according to a recent global survey, 74% of startups have seen revenues decline since the beginning of the COVID-19 crisis.

Wells Fargo’s IN2 is a $30 million technology incubator and platform funded by the Wells Fargo Foundation and co-administered by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) to speed the path to market for early-stage, clean technology entrepreneurs.

Launched in 2014, its initial focus on supporting scalable solutions for commercial buildings, it has since expanded to include advance technologies for housing affordability and sustainable agriculture solutions. 

“Innovation can and will persist, even during times of contraction, and this expedited funding is designed to support that,” said Trish Cozart, IN2 program manager at NREL. “Our Channel Partner ecosystem represents a wide range of experts in cleantech, agtech, and finance who understand the challenges startups grapple with” and how they might be mitigated.

The IN2 Channel Partner Awards program’s $5 million total fund addresses “barriers that startups face on the path to commercialization.” The new round of award funds will allocate support for programming or operational assistance designed to alleviate the COVID-19 related challenges that startups in the partners’ portfolios are experiencing in the current business environment.

“Startups have a difficult time getting from prototype to market even under the best of circumstances,” said Ramsay Huntley, Sustainable Finance Strategist at Wells Fargo. “Startups need to be able to adapt quickly to changing realities. IN2 is showing that it is prepared to do the same by being nimble in our support.”

The 18 award winners are ACRE of New York University, AgLaunch, AgStart, Austin Technology Incubator of University of Texas, BRITE, CCIA, Clean Energy Trust, Cleantech Open (West), Daugherty Water for Food of University of Nebraska, Imagine H2O, Launch Alaska, Los Angeles Cleantech Incubator (LACI), MaRS DD, NCBiotech, NECEC, New Energy Nexus, Texas A&M TEES, and VertueLab.

Established in 2017, the IN2 awards program committed to distribute the $5 million fund over four years to a nationwide network of 63 cleantech stakeholders within the Channel Partner ecosystem. Since the program has delivered over 200 grants.

Sprout Mortgage introduces $3M cap jumbo residential loan

East Meadow, N.Y., based lender, Sprout Mortgage is offering a new Premier Jumbo residential mortgage program with maximum loan limit cap of $3 million for both purchases and refinancing.

The program features loan-to-value (LTV) ratios up to 90%, minimum qualifying credit score of 660, up to 43% debt-to-income (DTI) ratio, and does not require borrowers to obtain private mortgage insurance.    

“With the addition of the new Premier Jumbo offering, Sprout is once again identifying, and responding to market demand while maintaining our credit and collateral standards to produce the highest quality loans,” said the lender’s President, Michael Strauss, in a company release. “This program is engineered to provide borrowers with the jumbo loan amounts they need.”

According to the company website, the nationwide lender focuses on lending solutions for residential real estate investors, self-employed borrowers, and those with recent credit events helping “a broad range of consumers” directly or through the brokers and lenders who serve them.  

The new loan program is one example of how the so-called non-qualified or unconventional lending market which shut down almost completely due to the Covid-19 outbreak. Additional details on the $3 million limit Premier Jumbo are available to mortgage professionals through the Sprout Client Portal, the company said, and the iQualifi app, which provides scenario eligibility and pricing. 

In today’s challenging non-conforming, non-agency private label lending market, Sprout is providing its nationwide network of residential mortgage professionals a new mortgage solution “for their clients buying or refinancing primary homes, second homes, and investment properties,” said Shea Pallante, Sprout’s Chief Production Officer.  

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